Excerpt from attachment: First excerpt from bottom of the article may explain more than the others what has precipitated this crisis: >>[Source: Handelsblatt 29.3.99] WIESBADEN, March 29--EVER MORE "ALARMING SIGNALS" ON THE EUROBOND MARKET are being noticed by the German daily {Handelsblatt}. Following last week's articles in the German press on the same issue, {Handelsblatt} on Monday devotes an extended article and its lead editorial by chief-editor Klaus Engelen on the very much increased risk on sovereign defaults on eurobonds. The nervousness on eurobonds erupted in particular after Pakistan had recently agreed to demands by the "Paris Club" of government creditors to abolish the first priority status of eurobonds, which means that future debt restructurizations will not only include credits, but eurobonds (bonds issued internationally by a government or a company in other than the national currency) as well. Pakistan has been the "test case" for pushing through this new principle. {Handelsblatt} quotes Moody's, which is speaking of a "paradigm shift" on global capital markets. Before, investors didn't have to worry about their eurobond holdings, even if the debtor had defaulted on foreign loans. The risks in the eurobond market, in particular in the high-yield area, have therefore vastly increased. {Handelsblatt} notes that instead of a few dozen of creditors, as in the case of foreign loans, a default on eurobonds would hit tens of thousands of investors. Each of them could start legal actions against the defaulting entity and any kind of rescheduling would be extremely difficult. And investors are fearing that it's now only a matter of time, when debtors like Russia, Ukraine, Romania, or others could default on their eurobond liabilities. (lok)<< Back to the top: >>Never forget: the driving force behind the war party, is the onrushing financial and economic collapse. At last night's Executive meeting in Europe, Lyn emphasized three leading features of the financial blowout: (1) Japan, which enters its new fiscal year, appropriately, on April 1, so that it can turn the world into an April Fool; (2) the Brazil crisis which is spreading through Ibero-America (e.g., Mexico, Colombia, Ecuador), with an added political dimension from the Pinochet case; and (3) the Russian and Eastern European financial crises, which everyone is desperately trying to control. For example, the IMF didn't give the credit to Russia to help Russia, but because of its own bankruptcy and the implications of a Russian default.<< ......[SOURCE: EIR EXCHANGE AT WOODROW WILSON CENTER CONFERENCE, 3/31/99] >>Steinberg asked the second question from the floor: He identified himself as an editor of LaRouche's EIR magazine. He stated that he came to the event, unconvinced that NATO had a reason to exist, and that Gow and Odom had, together, suggested that NATO perhaps existed to prevent the outbreak of another world war, beginning in the Balkans. Why wasn't that being stated explicitly? He also noted that, between the Iraq bombing of December 1998 and the Yugoslav bombing of the past week, it appeared that NATO was drifting into a doctrine of using air power as an arm of diplomacy. "Isn't this just a modern form of 18th century cabinet warfare?" Steinberg asked. Gow responded first, in typical British fashion (he is a leading military policy advisor to the Blair crowd, according to several U.S. sources familiar with his NATO doctrine paper). He noted that there are "some reasons" for maintaining NATO that cannot be stated publicly, such as the need to prevent a revival of the much-feared German revanchism. Odom immediately cut in, noting that, whenever the United States anchored it's military ties to Europe to Germany, the world was able to avoid war in Eurasia. But whenever the U.S. built its alliance on Britain and France, there was war. The allies won, but war-avoidance failed. He then went on to remind the audience that John Quincy Adams, with the Monroe Doctrine, had succeeded in averting the U.S. being drawn into a British-manipulated war in Europe. But with the Zimmerman Telegram, preceding World War I, and countless other later instances, British "covert operations" had frequently drawn the U.S. into European geopolitical wars. Odom also stated that he had found, among his students at Yale, that the "privileged class" in America had no concept of republican warfare. He said that he "wondered about the viability of a republic that can't conscript its citizens" to fight on behalf of the national interest. He answered Steinberg's criticism of the air war/diplomacy doctrine by agreeing, that the United States should have formally declared war against Yugoslavia, and that the U.S. and NATO cannot possibly stop Milosevic without a fullscale war, aimed at defeating him on the ground.<< >>[Source: Le Figaro 4/1/99] WE SHOULDN'T SCORN RUSSIA, says Russian specialist Helene Carrere d'Encausse in Monday's {Le Figaro}. Carrere d'Encausse denounces the way in which Russia has been treated in the whole Balkans affair: "The NATO decision to launch strikes against Serbia was taken without taking into account the problems it would pose for Russia, and furthermore, as if one wanted to underline that Russia no longer exists on the international scene." D'Encausse also hits the way in which, in Washington and in Brussels, one was eager "to insist on the fact that Russia, whose Prime Minister was going to beg for IMF funds to escape to an imminent financial disaster, would have no other option but that of accepting the all-power of NATO." Solidarity with the Serbs is not the most important thing currently in Russia, she says. "What counts, is the fact, that once again Russia has been humiliated," a sentiment which "has managed to assemble elements of Russian society which were until now disunited." " And the growing anti-Americanism of the recent months ... is turning today into a declared political hostility against the arrogance of those who abuse their momentary privilege of being a sole superpower." Carrere d'Encausse underlines that Europe still can play a role in this situation, since "Western Europe, which the Russians view as a mere tool for the United States, is spared by the current anti-western antipathy" which is gaining Russia.<< >>[Source: FNS transcript] April 1--IVANOV DISSECTS NATO POSTURE IVANOV CHARGES THAT NATO GOALS IN BALKANS INCLUDE PARTITION OF KOSOVO. The Russian Foreign Minister charged that the current operations were aimed at securing "NATO's unchallenged dictate in the Balkans." He continued, "At the same time, according to trustworthy information at our disposal, Washington is already actually working out variants of separating Kosovo from Yugoslavia or splitting that region. The implementation of such plans presupposes not only the strengthening of the Albanian fighters units, but the implementation of a ground operation. NATO is already preparing such a ground operation." HUMANITARIAN MATTERS. Citing the argument that "the Alliance is seeking to prevent a humanitarian disaster and the genocide of local Albanians," Ivanov cited the record of the OSCE [Organization for Security and Cooperation in Europe] mission in Kosovo, headed by U.S. Ambassador Walker, none of whose "reports referred to a humanitarian disaster or to ethnic cleansing. It is true that these reports spoke about human rights violations, incidents and clashes and terrorist acts, but they never referred to ethnic cleansing or humanitarian disaster. Russia categorically objected to the withdrawal of the OSCE mission from Kosovo. We warned at the time -- and you know that the mission was pulled out immediately before the start of the NATO aggression -- we warned that the withdrawal of the OSCE mission from Kosovo could send a dangerous signal to Albanian terrorists and lead to clashes on a larger scale." Subsequently, after the bombing began on March 24, the UN High Commissioner for Refugees has reported the displacement of 94,000 people from Kosovo. [RBD; full transcript 99134DMH010]<< >>[Source: Vatican, ANSA, AP March 31] VATICAN FOREIGN MINISTER IS LEAVING FOR BELGRADE WITH A PERSONAL LETTER FROM THE POPE TO MILOSEVIC. The decision of the unprecedented step (equivalent to sending the high official to Baghdad during the 1991 bombings) was taken, reportedly, during the meeting of all the ambassador of countries members of NATO and of the UN Permanent Council (see slug lil001]. Monsignor Jean Louis Tauran, could be preparing a visit to Belgrade of the Pope himself. According to ANSA, the content of personal letter is "personal, explicit, and concrete" concerning the ongoing war and the possibility of peace. The visit of Tauran would last one day. The Vatican official will meet the Yugoslavian Foreign Minister Zivadin Jovanavic, the Orthodox Patriarch Pavle, and Slobodan Milosevic. The meeting with Pavale is supposed to end with a common request for an "Easter ceasefire." In the context of a rapprochement between Catholic and Orthodox Churches, John Paul II had already planned a visit to Rumania on May 7-9. It appears that the Vatican has elaborated a concrete, though unofficial, peace plan. At the end of the Vatican Ambassadors meeting on March 30, the Vatican spokesman, Navarro Vals had mentioned the "involvement of the UN and the OSCE in the peace process." The possible deployment of UN or OSCE forces -- and NOT the Rapid reaction Corps of the Bloody Sunday's butcher, Sir Michael Jackson -- is a proposal reportedly supported also by Russian Prime Minister Primakov. According to ANSA, "one of the problems to be solved to have the delegation travel to Belgrade is how to arrive there: it is necessary a `green light' by NATO, so that the plane could fly. The alternative is to go through Budapest and continue by land, but some NATO `assurance' is needed anyway." [uip] [Source: ANSA March 31] POPE SENDS HEAD OF COR UNUM, MSR PAUL CORDES TO ALBANIA. "MAY THE LONG HOPED-FOR PEACE FINALLY ARISE!" Cor Unum is the Vatican organization for Refugees. In a letter to Paul Cordes, John Paul II writes that he "follows very closely the situation in Kosovo and Albania" and prays that "the responsible people and any person of good will show intention of reconciliation and peace.... In these days in which we prepare ourselves to celebrate the Easter festivities, Europe is, unfortunately, living another very sad hour of its history. The lacerating conflict developed in Kosovo, is causing in the population unspeakable suffering, and is sowing hatred, violence, death. The consequences are dramatic especially for the families destroyed and for the innumerable refugees forced to flee abandoning their houses and any thing they have. I follow closely ... and pray the Lord so that he have pity of his children so strongly tested.... So that the proximity of the Pope to the victims of this tragedy be felt in a more tangible way ... [Msr. Cordes is ordered to go to Albania] to bring to the refugees the my and the whole christian people's contribution of spritual and material solidarity. To children, to mothers, old people [Cordes will tell] that the pope is with them and will always be until a just and long lasting peace will triumph in the Balkans. Too much blood, and tears, those people have seen in this 20th century. May finally arise the long waited for day of peace." [uip]<< >>[Source: combined wires] WIESBADEN, March 31--RUSSIA IMPOSES NEW MEASURES AGAINST CAPITAL FLIGHT. On Monday, the Russian cabinet met for a special session on capital flight out of Russia, which Russian Prime Minister Primakov estimated at between $20 and $25 billion per year. He said, "This is a huge sum. The time has long passed when we should have erected a barrier to this, and we will erect a barrier to this." The cabinet announced a limit of $5000 on the amount of hard currency which Russian citizens can take out of the country legally. Before, there had been essentially no limit. On March 31, the Russian central bank announced that it had cut access to the foreign exchange market to four unnamed Russian banks in order to get the buying and selling of dollars under control. The four banks were accused of violating currency regulations and controls. According to the central bank, five other Russian banks had been restricted from foreign exchange trading already last week. (lok)<<For More information, contact Brian Lantz at [EMAIL PROTECTED] or 1 (800) 580-6901 SLEEPWALKING INTO WORLD WAR III Now that it is obvious to everyone that the NATO bombing raids have been a colossal failure, NATO has therefore decided ... to intensify the bombardment, and has now authorized bombing raids against government buildings in downtown Belgrade. The New York Times commented: "The decision to escalate the attacks came on a downbeat day for NATO, as its commanders received bad news from every direction." Isn't this how the world stumbles into World War III? In other words: if you've bungled the job -- compound the error by doing more of the same. The other variant on this lunacy is the increasing tempo of calls for the introduction of NATO ground troops into Kosovo -- another dangerous escalation, which would expand the undeclared war against Yugoslavia into a general Balkans war, and then rapidly into global war. Amidst this headlong rush into a global conflagration, there are a few voices of sanity: -- Prime Minister Primakov's mission to Belgrade and then Bonn, was an important effort to de-escalate the crisis, even as the NATO gang seems to have decided to reject the Primakov-Milosevic proposal before even hearing it. -- The Vatican is quietly carrying out is own peace initiative, holding meetings with the relevant ambassadors, calling for involvement of the UN and OSCE, and endorsing the Primakov initiative. The pope is also seeking a bombing pause over the upcoming Easter weekend -- a proposal which NATO rudely rejected yesterday. -- Within the U.S., there is widespread opposition to the NATO war policy from many quarters, and for many different reasons. Of major significance are the statements from retired U.S. General William Odom at a forum in Washington yesterday, where he denounced the idea a basing a NATO doctrine on the idea of opposing "rogue states," and said that he had found all of NATO's military doctrine to be militarily incompetent "double-talk." Odom also said that, whenever the United States had anchored its military ties to Europe to Germany, the world was able to avoid war in Eurasia, but that whenever the U.S. based its alliance on Britain and France, there was war. Obviously, there is much more involved, in what is going on in the Balkans, than merely incompetence and bungling: behind the bungling lies the insanity of the B-A-C crowd -- the British- American-Commonwealth oligarchical complex -- exemplified by the British Royal Family and their hangers-on, who would rather plunge the world into thermonuclear war than give up their oligarchical power. Never forget: the driving force behind the war party, is the onrushing financial and economic collapse. At last night's Executive meeting in Europe, Lyn emphasized three leading features of the financial blowout: (1) Japan, which enters its new fiscal year, appropriately, on April 1, so that it can turn the world into an April Fool; (2) the Brazil crisis which is spreading through Ibero-America (e.g., Mexico, Colombia, Ecuador), with an added political dimension from the Pinochet case; and (3) the Russian and Eastern European financial crises, which everyone is desperately trying to control. For example, the IMF didn't give the credit to Russia to help Russia, but because of its own bankruptcy and the implications of a Russian default. [SOURCE: EIR EXCHANGE AT WOODROW WILSON CENTER CONFERENCE, 3/31/99] RETD. GEN. WILLIAM ODOM STRONGLY DENOUNCED THE KOSOVO "UNDECLARED WAR" ACTION AND THE BRITISH WAR RECORD at a conference of the Woodrow Wilson Center on Wednesday. Billed as a forum where Odom would "discuss the importance of ground troops," it turned out to be nothing of the sort, at least partly due to the intervention by EIR correspondent Jeff Steinberg. In a discussion that followed the first question by Steinberg, which challenged Odom and the other speaker, one James Gow of Kings College, University of London, England (author of a paper on the New Nato Doctrine), to justify NATO's continued purpose under the current actions, Odom said that it is impossible for him to conceive how the Kosovo action can be taking place without a declaration of war; he also denounced the idea that war "against rogue states" can ever be considered a doctrine, because of the totally subjective nature of the definition (i.e., that "one man's rogue state is another man's ally" and "one man's terrorist is another man's freedom fighter"). Gow had defended the continued existence of NATO in a half-hour summary of his policy paper, "Stratified Stability: NATO's New Strategic Concept?" in which he argued that the new "enemy image" for NATO is the threat of "instability." Gow presented a convoluted concept of NATO redefining the military/political alliance as an amalgam of NATO-wide, European-only, and U.S.-European joint peace-keeping operations, but never presented a coherent military concept to justify the continued existence of the alliance. In a 15-minute refutation of Gow's presentation, General Odom, who served as the chief military representative on the Carter Administration National Security Council, and later was the head of the National Security Agency (NSA), tore apart Gow's post-modernist ideas, and argued that warfare has not fundamentally changed since Clausewitz wrote {On War}. Odom reviewed the history of NATO's evolved Cold War military strategy, including the "forward defense" doctrine, MC-14/3, warning that he had found all of NATO's military doctrine to be militarily incompetent "double-talk," which he labeled "NATO-speak." He warned that Secretary of State Madeleine Albright is peddling a new NATO doctrine of "far out of area deployment," which he strongly opposed. He said that the Albright, et al. notion of redefining NATO as an alliance opposing "rogue states" was a dangerous blunder, and on this one point, he said that he sympathized with the European NATO states, that were much more wary than Washington about the dangers of building a military alliance against "rogues and terrorists." He predicted that if NATO is redefined on the basis of such vaguely defined missions, it will not long survive European skepticism and U.S. Congressional scrutiny. Steinberg asked the second question from the floor: He identified himself as an editor of LaRouche's EIR magazine. He stated that he came to the event, unconvinced that NATO had a reason to exist, and that Gow and Odom had, together, suggested that NATO perhaps existed to prevent the outbreak of another world war, beginning in the Balkans. Why wasn't that being stated explicitly? He also noted that, between the Iraq bombing of December 1998 and the Yugoslav bombing of the past week, it appeared that NATO was drifting into a doctrine of using air power as an arm of diplomacy. "Isn't this just a modern form of 18th century cabinet warfare?" Steinberg asked. Gow responded first, in typical British fashion (he is a leading military policy advisor to the Blair crowd, according to several U.S. sources familiar with his NATO doctrine paper). He noted that there are "some reasons" for maintaining NATO that cannot be stated publicly, such as the need to prevent a revival of the much-feared German revanchism. Odom immediately cut in, noting that, whenever the United States anchored it's military ties to Europe to Germany, the world was able to avoid war in Eurasia. But whenever the U.S. built its alliance on Britain and France, there was war. The allies won, but war-avoidance failed. He then went on to remind the audience that John Quincy Adams, with the Monroe Doctrine, had succeeded in averting the U.S. being drawn into a British-manipulated war in Europe. But with the Zimmerman Telegram, preceding World War I, and countless other later instances, British "covert operations" had frequently drawn the U.S. into European geopolitical wars. Odom also stated that he had found, among his students at Yale, that the "privileged class" in America had no concept of republican warfare. He said that he "wondered about the viability of a republic that can't conscript its citizens" to fight on behalf of the national interest. He answered Steinberg's criticism of the air war/diplomacy doctrine by agreeing, that the United States should have formally declared war against Yugoslavia, and that the U.S. and NATO cannot possibly stop Milosevic without a fullscale war, aimed at defeating him on the ground. Steinberg asked a follow-on question about whether the NATO-only deployment in the Balkans was a major impediment to the Clinton Administration pursuing "strategic partnerships" with Russia and China, to avoid crises like the current Balkan war. While neither Gow nor Odom discussed this issue in detail, the next questioner, Cato Institute's Stan Kober, noted that he was alarmed that Primakov was seeking to bring China and India into an alliance. Kober asserted that this alliance was in response to the NATO actions in the Balkans. After the event, Steinberg confronted him on this nonsense, and he admitted that he knew nothing of the Eurasian Land Bridge, but had assumed that Primakov was acting against the West, in pushing the Russia-India-China partnership. He was equally ignorant about the 19th century, pre-Bolshevik history of the Russians' cooperation with the United States, the role of Mendeleyev and Witte in the construction of the trans-Siberian Railroad, or the concept of Sun Yat-sen to build a new Silk Road linking Asia to Europe via long-distance rail lines and ago-industrial development corridors. The bottom line: there is a very visible debate underway over all the key policy issues; and EIR and LaRouche's ideas have weight. [mjs/js_] [SOURCE: WaPo Op Ed; 3/31/99] RETIRED US OFFICIAL WILLIAM HYLAND JOINS ATTACKS ON INCOMPETENT MILITARY DECISIONS IN KOSOVO, NATO. In an Op-Ed in Wednesday's {Wash. Post}, William Hyland, the former DoJ official in the Nixon and Ford Administrations, and later editor of Foreign Affairs, calls for the U.S. to INCLUDE Russia in the solution to the Kosovo war crisis, forcefully attacks the short-sighted decision to rush into the war. Hyland says, "The only real alternative is to revive international diplomacy ... The way out is for Washington to recognize that the problem is preeminently a political one; military pressure will help but it cannot be the solution...." He says, "the crisis is no longer a Balkan affair but a pan-European problem that cannot be solved by NATO alone." Twice in the article, he insists that no solution can be reached in excluding Russia. Hyland says that the Rambouillet discussions are over, and even the Dayton accords are finished after so much bombing, hatred and threats. Hyland suggests a new framework drawing peacekeepers from all European countries, and perhaps entering under a council of the Organization of Security and Cooperation in Europe, though he unfortunately uses the historical model of the 1878 Congress of Berlin as a reference point for such a conference. Hyland makes the point that the Clinton Administration, having RUSHED into the air strikes, is now in a "virtually impossible position." Hyland stresses, as many, many military leaders are now saying openly -- there is NO WAY that air power can ever have been thought to have been a way to stop the atrocities against Kosovars -- and to go the next "obvious" step would mean "QUAGMIRE." (mjs) EASTERN EUROPE [Source: Reuters, April 1] April 1--NATO SECRETARY-GENERAL PREPARES PUBLIC FOR PROTRACTED CONFLICT. NATO Secretary-General Javier Solana told a news conference in Brussels that the operation would succeed, but would require "stamina and determination." He called Milosevic's "barbarous" crackdown on Kosovo's ethnic Albanian majority, which caused a tidal wave of refugees, "the antithesis of all we value." Solana said today that "NATO remains united and determined. After one week of our air operations, I am confident that we are having a major impact on Belgrade's criminal war machine." [smt] [Source: Interfax via AFP] April 1--CHIEF OF STAFF KVASHNIN MENTIONS THE USE OF NUCLEAR WEAPONS. The following single sentence, reported by AFP yesterday citing Interfax, is attributed to Gen. Kvashnin, chief of the General Staff of the Russian Armed Forces: "If the choice is between life or death for Russia, then whatever the armed forces have, in particular nuclear weapons, should be used." The report said that these words were uttered by Kvashnin to Interfax, following yesterday's closed session of the State Duma on the Balkans conflict. {EIR} is checking Russian sources for a fuller version of Kvashnin's remarks. [RBD] [Source: RFERL, March 30] WIESBADEN, April 1--RUSSIAN LEAKS ABOUT U.S. TESTING ELECTRO-MAGNETIC PULSE (EMP) WEAPONS UNDER COMBAT CONDITIONS AGAINST SERBS. On March 29, the Russian Defense Ministry charged NATO with concealing the real nature of its military activities in the air war against Serbia. According to the ministry, NATO strikes have "largely damaged civilian facilities, notably educational institutions, heating and electricity plants, and residential and administration buildings." On March 30, sources at the Defense Ministry specified in talks with Itar-Tass that the U.S. is testing new secret weapons in Yugoslavia, one of which is designed to destroy radio electronic equipment by generating an electric pulse. Also, {Rossiiskaya Gazeta} had carried a report, March 27, that the U.S. was using a new weapons system during its first air strike against Yugoslavia, but the daily did not elaborate on the characteristics of the new system. The EMP weapons issue was also taken up by David Hoffman, the Moscow correspondent of the {Washington Post}, who said in response to a question about the "new secret weapons," in an international phone-in online discussion, March 30: "The Russians hint that it's some kind electro-magnetic pulse bomb that wipes out radio communications. I recall they were very worried about this as a prelude to a nuclear attack in the years of the Cold War." (rap) [Source: Internet, British Foreign and Commonwealth Office, April 1 and March 31] April 1--BRITISH SECRETARIES OF STATE AND DEFENCE CONTINUE PROPAGANDA BLITZ AGAINST MILOSEVIC. Addressing the Ministry of Defence press conference on April 1, Foreign Secretary Robin Cook has stressed that "time is not on President Milosevic's side" and that NATO action will be maintained until the ethnic cleansing in Kosovo is stopped and the refugees allowed to return home. Secretary Cook referred to the current crisis as "one of the worst examples of mass killing and ethnic cleansing in Europe this century--and that is against strong competition." He said that the "propaganda war" would be stepped up to make the truth behind President Milosevic's atrocities and the reasons for NATO's action available, via the Internet, to the Serbian people. Commenting on the diplomacy by Russian Prime Minister Yevgeni Primakov on March 31, British Secretary of Defence George Robertson said that NATO would be stepping up the pressure on President Milosevic, with round-the-clock operations conducted to increase damage to his war machine. Secretary Robertson described Milosevic's response to the Russian delegation as "inadequate and spurious", and said that this "miscalculation" by Belgrade revealed "the first crack in Milosevic's wall of obstinacy." The UK's Chief of the Defence Staff, General Sir Charles Guthrie, went on after Secretary Cook's daily Ministry of Defence briefing to summarize NATO action over the first five days of the operation, and spoke of the growing relationship between Milosevic and Iraqi President Saddam Hussein. Military action against Milosevic may take some time, the General concluded, but British forces were prepared for a long campaign, "if it is what is required." [smt] [Source: wires] April 1--RUSSIAN NAVY SHIPS PREPARE TO ENTER MEDITERRANEAN. The Russian Foreign Ministry said in a statement today, that concerns about the Russian dispatch of a Black Sea Fleet reconnaissance ship to the Mediterranean, expressed by U.S. Secretary of State Madeleine Albright in a phone call yesterday to Russian Foreign Minister Igor Ivanov, were "absurd in light of NATO's huge forces in the Balkans." Russia, said the statement, "has no intention of interfering in the current conflict around Yugoslavia." As confirmed by Defense Minister Sergeyev yesterday, one ship is to set sail tomorrow. Turkey has granted passage to eight Navy ships in all. [RBD] [Source: Nezavisimaya Gazeta electronic version, March 31; wires April 1] April 1--RUSSIAN NAVY MANEUVERS WORLDWIDE. The Moscow daily {Nezavisimaya Gazeta} yesterday reported on naval maneuvers by three out of the four fleets of the Russian Navy, under the headline "General muster declared in the Navy." Valeri Aleksin wrote that since the launching of "NATO aggression against Yugoslavia," "almost 50 ships have put out to sea simultaneously, representing the combat core of Russia's fleets, including ten nuclear submarines, ... the most highly mobile and effective component of the NATO's strike force." Vice Admiral Vyacheslav Popov is commanding "a muster and sailing of the main forces of the Northern Fleet." They are practicing strategic, operational, and tactical missions. The flagship of the Northern Fleet, the heavy nuclear missile cruiser "Pyotr Veliky" is taking part, along with the heavy aircraft carrier-cruiser "Admiral Kuznetsov" and a dozen or more other ships, "capable of carrying out combat actions in modern warfare against any types of enemy air attack." In the Pacific Fleet, Admiral Mikhail Zakharenko is commanding exercises in the Sea of Japan, with another dozen or more ships practicing anti-aircraft and landing operations. "The Black Sea Fleet is completing operational-tactical and tactical mission tasks at sea, under the command of fleet commander Vice Admiral Vladimir Komoyedov." The capabilities of the Black Sea Fleet are rather more modest than a decade ago, wrote Aleksin, "however, here, too, the most powerful ships of the fleet set out to sea and successfully carried out their missions." These were the missile cruiser "Admiral Golovko," the anti-submarine ship "Kerch," and the guided-missile ship "Bora." "The results of the naval exercises show that our Navy, on orders from the Supreme Commander-in-Chief, President Boris Yeltsin, is prepared to defend Russian national security interests in operationally important regions." The article concluded with the note that such reasons include the Mediterranean and the Indian Ocean, where the Navy had a permanent operational presence for 50 years. On April 1, Interfax and RIA news agency both quoted the Russian naval press service on the sighting of another country's submarine, close to the area of the Northern Fleet's maneuvers in the Barents Sea. The report said that the submarine, of undetermined nationality, had been forced out of the maneuver zone. Interfax commented, "In the opinion of experts, the incident shows the increased attention that NATO forces are paying to the activities of all Russian fleets." [RBD] [Source: Frankfurter Allgemeine, Apr. 1] WIESBADEN, April 1--NATO LACKS ALL PRECONDITIONS FOR DEPLOYMENTS OF GROUND FORCES IN THE KOSOVO CONFLICT, Karl Feldmeyer, the chief military correspondent of the {Frankfurter Allgemeine} daily, stated categorically in an article today. He wrote that any call for the stationing of ground forces in numbers sufficient for a successful ground war against the Serbs, which would require up to 200,000 soldiers, neglects the simple fact that it would take four months to get the required heavy combat equipment to the Balkans. Also, any call for the use of the 11,000 NATO soldiers that are already stationed in Macedonia, misses the crucial point that these do not have their heavy combat equipment available, such as main battle tanks and the like. Some of the equipment for the German contingent in Macedonia is stored at the Greek port of Thessaloniki, and would take time to be shipped to Macedonia. The Serbs, however, have already been able to position two entire tank brigades plus two motorized infantry brigades and other units totalling 15,000 men, across the border in Kosovo, Feldmeyer reported. Any idea about deploying ground forces during the next phase of NATO attacks, was also categorically opposed by Paul Breuer, in a radio interview with DLR station this morning. Breuer, defense policy spokesman of the Christian Democrats' parliamentary group in Bonn, said that while the basic preconditions for a successful operation on the ground do not exist anyway, the German parliament would not give a political mandate to such a ground operation, either. (rap) [Source: The Times, Apr.1, 1999] THE TIMES CALLS FOR GROUND WAR, EVEN IT IT TAKES TWO MONTHS TO PREPARE -- and no Kosovars are left in Kosovo. In its editorial entitled "The Fog of War, Strategies for the sure defeat of Milosevic", the {Times} admits that the air war has not been successful in stopping the ethnic cleansing. They also admit that a ground war would take 200,000 men and take two months to prepare and that "Milosevic could empty Kosovo of Albanians well before that. Nonetheless, they conclude that NATO has to make it a "pyrrhic victory". They write: "America, Britain and France should consult now on a strategy to persuade NATO's 19 governments -- and the American Congress -to think the unthinkable; because it is even more unthinkable that NATO should fail to stamp out the `great terror' that it is no exaggeration to accuse Mr. Milosevic of inflicting. The human cost of his rule is appalling enough; but the erosion of NATO's will to mount guard over European stability would be a casualty of unimaginable consequence for peace." [dea] [Source: Le Figaro 4/1/99] WE SHOULDN'T SCORN RUSSIA, says Russian specialist Helene Carrere d'Encausse in Monday's {Le Figaro}. Carrere d'Encausse denounces the way in which Russia has been treated in the whole Balkans affair: "The NATO decision to launch strikes against Serbia was taken without taking into account the problems it would pose for Russia, and furthermore, as if one wanted to underline that Russia no longer exists on the international scene." D'Encausse also hits the way in which, in Washington and in Brussels, one was eager "to insist on the fact that Russia, whose Prime Minister was going to beg for IMF funds to escape to an imminent financial disaster, would have no other option but that of accepting the all-power of NATO." Solidarity with the Serbs is not the most important thing currently in Russia, she says. "What counts, is the fact, that once again Russia has been humiliated," a sentiment which "has managed to assemble elements of Russian society which were until now disunited." " And the growing anti-Americanism of the recent months ... is turning today into a declared political hostility against the arrogance of those who abuse their momentary privilege of being a sole superpower." Carrere d'Encausse underlines that Europe still can play a role in this situation, since "Western Europe, which the Russians view as a mere tool for the United States, is spared by the current anti-western antipathy" which is gaining Russia. [cbi] [Source: Federal News Service, Press Conference, Chinese Embassy Deputy Chief of Mission, Liu Xiaoming, April 1] April 1--DESPITE CONTRARY PRESS SPIN, ZHU RHONGZI'S PRESIDENTIAL-LEVEL VISIT TO THE U.S. IS A DEFINITE GO. Chinese Embassy Deputy Chief of Mission, Liu Xiaoming, gave a press conference at the Chinese Embassy in Washington, D.C., where he stated emphatically that Chinese Prime Minister Zhu Rhongzi, whose visit is being made at the personal request of President Bill Clinton, will definitely take place as scheduled, April 6 to 14: "As you know, Premier Zhu will be visiting the United States. He will be paying an official visit to the United States from the 6th of April and the 14th at the invitation of President Clinton. This will be a very important visit. And this is the first visit by Premier Zhu since he took office as Chinese premier. And he will come here at a very important juncture in our relations between the United States and China as we enter the third decade. We have just celebrated the 20th anniversary of the establishment of our diplomatic relations. So this is a very important visit and an important visit in the sense that we are going to say good-bye to the old century and going to meet the new millenium. So this visit, you can also regard it as a visit of century, in my words. "The purpose of the visit. I would characterize that there will be four major purposes of his visit. "First is to further promote the growth of China-U.S. relations built upon the exchanges of visits between President Jiang and President Clinton.... "The second purpose of this visit is that we think it's important for the leaders of our two countries to strengthen their strategic dialogue and exchange of views on issues affecting every member of our global village, especially as we are entering a very changing international situation; these problems, including global peace, security, financial stability, economic prosperity, transitional problems, environmental protection. This strategic dialogue between our top leaders of our two countries will, not {only} serve the interests of our two countries, but also the peoples of the world. "The third purpose of his visit, I would say, is that Premier Zhu throughout his visit, will meet with the people from a broad spectrum of American society, not only including federal and state leaders, but also congressional members, members of Congress, House members and Senators, business community, academia, think tanks. In addition to his visit to Washington, he will travel to five cities: L.A., Denver, Chicago, New York, Boston.... "The premier will talk about China's reform and opening up economic situation in China and other issues of local interest. We hope that this visit will give American public, American people, a better understanding of China and a better understanding of the importance of Chinese-U.S. relations.... "The fourth purpose of this visit, I believe, will further promote trade and economic relations between our two countries as well as our cooperation in other areas.... At this moment, the relevant departments of our two governments are very busy, involved in negotiations to sign a series of agreements and also commercial contracts." [smt] [Source: FNS transcript/translation of Yeltsin] April 1--YELTSIN CALLS FOR G-8 MEETING. The following statement was issued by President of the Russian Federation B.N. Yeltsin today: "Despite Russia's most resolute actions, NATO's military action against Yugoslavia, unfortunately, continues to expand. This escalation threatens to grow into a big calamity, and not only for Europeans. This should not be allowed to happen. The Kosovo problem can and should be settled at the negotiating table. Ye.M. Primakov became convinced of this when he spoke with S. Milosevic. "Today I instructed the Minister of Foreign Affairs of Russia to urgently suggest to the foreign ministers of countries of the Big Eight to hold an urgent meeting of foreign ministers to work out ways of the speediest overcoming of the crisis. "Each day that is lost brings new casualties and tragedies. "It is necessary to act without delay." Moscow, the Kremlin, April 1, 1999 [RBD] (Source: Interfax and Reuters) WIESBADEN, April 1 -- AS CITED BY INTERFAX, RUSSIAN FOREIGN MINISTER IGOR IVANOV DECLARED YESTERDAY THAT THE WAR IN YUGOSLAVIA could affect Albania, Macedonia, Bulgaria and Hungary, and: "The situation in Bosnia-Hercegovina is under threat of destabilization -- the Dayton Agreements are in jeopardy." Ivanov said he had spoken on the phone with U.S. Secretary of State Madeleine Albright, and told her the NATO position on Yugoslavia is "a stance leading to a dead end." He said Albright had asked him about planned Russian ship movements. Defense Minister Sergeyev also warned about the war spreading, telling Interfax: "This is like a whirlpool which is drawing more and more countries into it." [kgg] [Source: FNS transcript] April 1--IVANOV DISSECTS NATO POSTURE. Russian Foreign Minister Igor Ivanov's joint press conference March 31, held with Defense Minister Igor Sergeyev at the Foreign Ministry, was partially reported in the April 1 briefing, with respect to Ivanov's comments about "most" NATO countries having agreed on the eve of the Primakov-Ivanov-Sergeyev mission to Belgrade, that they would be looking for "at least some signal" from Yugoslavia. Ivanov's words are important for the record of the official Russian stance and activity, after the mission to Belgrade, and before President Yeltsin's latest diplomatic appeals. THE BELGRADE MISSION. After detailing the Russian proposals, what Slobodan Milosevic had agreed to, and the response of German Chancellor Schroeder, Ivanov said, "From on board the plane en route to Moscow, Primakov reported to the President of Russia the results of the delegation's trip to Belgrade and Bonn. Boris Nikolayevich Yeltsin regards the trip as timely, he positively assessed its results as optimum ones in the present conditions, and instructed the government to further press for an ending of the NATO aggression and for a resumption of the negotiating process." NATO'S POSTURE. "We were ready in principle for the reaction that we heard in Bonn to Belgrade's signal. The point is that the moment the trip of the Russian delegation became known, urgent consultations were held between NATO capital cities. And a certain stand was agreed upon in advance. It was made public even before the talks in Belgrade ended.... What is the essence of NATO's present stand? I repeat, the present one, because in its present form it was formulated for the first time. Belgrade must immediately withdraw from Kosovo all its troops.... What would this mean in practice? In practice this would mean that Yugoslavia would have to renounce its sovereignty over that region, hand it over to the so-called Kosovo Liberation Army, which gets all the necessary support from the United States and its allies." Here followed Ivanov's summary of what had been communicated to "our Western partners" on the eve of the trip, and his statement that "most of our Western partners, I want to emphasize, most of our Western partners asked Russia to secure from Belgrade at least some signal that would allow NATO at least to suspend the military operation." During the mission, "Such a signal was received from Belgrade. A very definite signal. NATO's response is known. A new ultimatum and a further escalation of the aggression. In this connection, the question arises: what are the true aims of those who planned, launched and are now expanding the NATO aggression against Yugoslavia?" IVANOV CHARGES THAT NATO GOALS IN BALKANS INCLUDE PARTITION OF KOSOVO. The Russian Foreign Minister charged that the current operations were aimed at securing "NATO's unchallenged dictate in the Balkans." He continued, "At the same time, according to trustworthy information at our disposal, Washington is already actually working out variants of separating Kosovo from Yugoslavia or splitting that region. The implementation of such plans presupposes not only the strengthening of the Albanian fighters units, but the implementation of a ground operation. NATO is already preparing such a ground operation." HUMANITARIAN MATTERS. Citing the argument that "the Alliance is seeking to prevent a humanitarian disaster and the genocide of local Albanians," Ivanov cited the record of the OSCE [Organization for Security and Cooperation in Europe] mission in Kosovo, headed by U.S. Ambassador Walker, none of whose "reports referred to a humanitarian disaster or to ethnic cleansing. It is true that these reports spoke about human rights violations, incidents and clashes and terrorist acts, but they never referred to ethnic cleansing or humanitarian disaster. Russia categorically objected to the withdrawal of the OSCE mission from Kosovo. We warned at the time -- and you know that the mission was pulled out immediately before the start of the NATO aggression -- we warned that the withdrawal of the OSCE mission from Kosovo could send a dangerous signal to Albanian terrorists and lead to clashes on a larger scale." Subsequently, after the bombing began on March 24, the UN High Commissioner for Refugees has reported the displacement of 94,000 people from Kosovo. [RBD; full transcript 99134DMH010] [Source: Reuters, Interfax] WIESBADEN, April 1 -- OTHER IVANOV HIGHLIGHTS FROM INTERFAX. The Russian press agency also highlighted the section of Ivanov's remarks, where he said that the coming NATO escalation concerned Russia and presented the Russian Armed Forces with "new tasks". He said, "We have to be ready for future developments," and the "tasks" would include heightened reconnaissance. It was at this same press conference that Defense Minister Sergeyev confirmed the decision to send the one reconnaissance ship, and have it sail April 2, had been taken because of the "heightening intensity of the conflict, which prompts us to seek better information about what is going on." One day earlier, March 30, {Izvestia} ran an article saying that Yugoslavia is preparing a partition of Kosovo, where the future Serb zone would include Prishtina and the main Orthodox monasteries, and the Kosovo Polje (Field) the site of the famous 1389 battle, where the Serbian army was crushed by the Ottomans. [KGG] [Source: U.S. Catholic Conference press release, April 1] EIGHT U.S. CARDINALS URGE MILOSEVIC, CLINTON TO NEGOTIATE PEACE. The eight U.S. Cardinals, in an extraordinary joint action, have sent letters to President Clinton and Yugoslavia's President Slobodan Milosevic calling for an end to all violence in Kosovo and the immediate return to negotiations. The letter to Milosevic urges "an immediate cessation of Serbian military and police operations against the population of Kosovo, and your government's cooperation in accord with international conventions, with those agencies wishing to provide emergency assistance to the population of Kosovo." The letter to Clinton wrongly states that Yugoslavia's refusal to accept the Rambouillet compromise "brought about the NATO military intervention." It then asks for a NATO cease-fire and a return to negotiations. "There must be no time lost in an effort to return to the negotiating table. The efforts of these negotiations must seek to guarantee the populations of Kosovo a degree of autonomy which respects their legitimate aspirations, according to history and law." Both letters urge the convening of a peace conference with the involvement of other states in the region. "The United Nations and its specialized agencies should be a part of the peace process," the Cardinals told President Clinton. "Peace will invariably demand the creation of an effective international peace keeping force." They quote Pope John Paul II's remarks last Sunday: "There is always time for peace. It is never too late to meet again and negotiate." [mw_] [Source:Guardian, IHT, other press, March 31, 1999] WHAT RUSSIAN PRIME MINISTER PRIMAKOV DISCUSSED WITH SLOBODAN MILOSEVIC, was summarized in 5 points in the Guardian account, corroborated by other press and TV reports. 1) Milosevic would withddraw Serb forces from Kosovo, on condition 2) that NATO halted air bombardments. 3) Yugoslavia says it seeks a peaceful settlement, and 4) demands that NATO stop backing the UCK (KLA). 5) Yugoslavia would allow "oeaceful" ethnic Albanians the right to return. Milosevic appeared on Yugoslav TV, and stated, "To open up a space for a political solution, the aggression on our country must cease immediately. From our side, as a sign of sincerity (!) of our efforts to solve the problems of Kosovo peacefully, the Yugoslav leadership will accept the Russian proposal that after the cessation of bombing ... (it will) begin decreasing the presence of part of its forces that are in Kosovo." [mlm] [Source:Ansa, Fed news, Washington Post march 31] PRESIDENT YELTSIN ASKED TODAY PRIMAKOV AND THE GOVERNMENT TO "ACTIVELY PURSUE THE DIPLOMATIC EFFORTS TO END NATO AGGRESSION." Yeltsin also stressed that that Primakov will "relaunch the negotiating process," according to the Kremlin spokesman, Dimitri Iakushkin. Yeltsin does not believe that the Mission of Prime Minister Primakov reached a negative result and called it "timely." The President had analyzed a written detailed report from the Prime Minister on his meetings both in Belgrade and Bonn. Primakov himself in a statement today stressed that "in Bonn we became convinced of the fact that, inside the Atlantic Alliance, there is a coordinated line of action to continued the war operations. It is a wrong and tragic decision that Russia will continue to operate to stop." Interestingly, the Italian press agency ANSA in a dispach stressed that "according to the Russian premier inside NATO, there is A FACTION THAT WANTS TO PURSUE THE WAR AT ANY COST." Also interestingly the translation of the Primakov's speech's passage hinting to a split inside NATO, has been translated in a more "neutral" and "objective" way by Federal News Service: "When we came to Bonn we saw that NATO has an agreed line and a commitment to continue military actions against Yugoslavia." Primakov also stated: "I would like to say that I reported the results of the trip from board the plane to President Yeltsin. I told him everything in great detail. He approved of the results and he said that they were timely because it was necessary to demonstrate to everyone -- and do it for our own sake also -- that Russia has carried out a mission aimed at achieving a political solution of the problem of Yugoslavia, the Kosovo problem, at stopping the barbaric bombings and halting aggressive military actions against Yugoslavia. I would like to say that in our view -- after very intensive talks, six hours of talks in Belgrade -- the Yugoslav side has given a signal which, given the wish, can be interpreted as a signal for ending the bombings. These military actions will bring no results. They can merely plunge the world into greater complications. They will not lead to a stabilization of the situation in Kosovo or of the situation in the Balkans. They can merely complicate the situation globally...." The Russian leader commented on the "humanitarian issue" saying that it being used by NATO to continue the war. [uip] [original text in daybook uip004, dmh002] (Source: Holy See Press Office) WIESBADEN, March 31 (EIRNS)--VATICAN PEACE INITIATIVE PRESENTED TO ALL AMBASSADORS INVOLVED IN THE WAR. As reported in an official statement of Dr. Joacquin Navarro-Valls, head of the Holy See Press Office: "On Tuesday afternoon, March 30th, a meeting was held in the Vatican, under the presidency of Card. Angelo Sodano, head of the Segreteria di Stato, to which had been invited all ambassadors of NATO countries as well as countries belonging to the UN Security Council and accredited by the Holy See. The aim of the meeting was to inform the ambassadors on the position of the Holy See concerning the situation in former Yugoslavia. Card. Sodano expressed the worries of the Pope for the suffering populations and illustrated the action started by the Holy See for a rapid solution of the crisis. His Excellency Mons. Tauran, secretary for the relations to States, expressed the position of the Holy See, its appreciation for the efforts conducted in the last months by the international community in favor of the Kosovo population, the urgent need to stop military operations so that violence does not have the last word, and the urgency to send humanitarian aid for the refugees, as well as the need to involve the UN and the OECD in the peace process. He informed the ambassadors about the steps taken by the Segreteria di Stato towards various governments and international organizations." (lil) (Source: Osservatore Romano, La Stampa) WIESBADEN, March 31 (EIRNS)--VATICAN ENDORSES PRIMAKOV'S PEACE INITIATIVE with an article in its official daily, {Osservatore Romano}, entitled "Russia tries a mediation." The article reports that "a diplomatic mission in Belgrade to contribute to the immediate end of war operations and the return to negotiations is being conducted in these hours by Russian Premier Evghieni Primakov, while all over the world demonstrations for peace continue" and quotes at length Primakov, Yeltsin, and the Russian chief of Staff Anatoli Kvashnin to the effect that Russia is not willing to be drawn into the conflict and will try everything to stop it, despite the "tragic mistake" of NATO to try to replace UN and OECD. At the same time as the meeting with the European and Russian ambassadords took place at the Vatican, another one was held in New York with Mons. Renato Martino, Vatican ambassador to the UN, who, according to Italian daily La Stampa, "had similiar consultations, this time 360 degrees ones" with all ambassadors to the UN (which means including not only Russia but also China, which is not accredited to the Holy See yet). The Vatican offered its mediation which "requires obviously two partners who want to speak to each other, and a third one ready to help." La Stampa reports also that Card. Sodano and Mons. Tauran met at length and separately the Yugoslavian ambassador to the Holy See Maslovaric, who expressed his appreciation for the Vatican mediation. According to La Stampa, the Pope is considering a quick trip to Yugoslavia in may, when he will travel to Romania. (lil) [Source: Vatican, ANSA, AP March 31] VATICAN FOREIGN MINISTER IS LEAVING FOR BELGRADE WITH A PERSONAL LETTER FROM THE POPE TO MILOSEVIC. The decision of the unprecedented step (equivalent to sending the high official to Baghdad during the 1991 bombings) was taken, reportedly, during the meeting of all the ambassador of countries members of NATO and of the UN Permanent Council (see slug lil001]. Monsignor Jean Louis Tauran, could be preparing a visit to belgrade of the Pope himself. According to ANSA, the content of personal letter is "personal, explicit, and concrete" concerning the ongoing war and the possibility of peace. The visit of Tauran would last one day. The Vatican official will meet the Yugoslavian Foreign Minister Zivadin Jovanavic, the Orthodox Patriarch Pavle, and Slobodan Milosevic. The meeting with Pavale is supposed to end with a common request for an "Easter ceasefire." In the context of a rapprochement between Catholic and Orthodox Churches, John Paul II had already planned a visit to Rumania on May 7-9. It appears that the Vatican has elaborated a concrete, though unofficial, peace plan. At the end of the Vatican Ambassadors meeting on March 30, the Vatican spokesman, Navarro Vals had mentioned the "involvement of the UN and the OSCE in the peace process." The possible deployment of UN or OSCE forces -- and NOT the Rapid reaction Corps of the Bloody Sunday's butcher, Sir Michael Jackson -- is a proposal reportedly supported also by Russian Prime Minister Primakov. According to ANSA, "one of the problems to be solved to have the delegation travel to Belgrade is how to arrive there: it is necessary a `green light' by NATO, so that the plane could fly. The alternative is to go through Budapest and continue by land, but some NATO `assurance' is needed anyway." [uip] [Source: ANSA March 31] POPE SENDS HEAD OF COR UNUM, MSR PAUL CORDES TO ALBANIA. "MAY THE LONG HOPED-FOR PEACE FINALLY ARISE!" Cor Unum is the Vatican organization for Refugees. In a letter to Paul Cordes, John Paul II writes that he "follows very closely the situation in Kosovo and Albania" and prays that "the responsible people and any person of good will show intention of reconciliation and peace.... In these days in which we prepare ourselves to celebrate the Easter festivities, Europe is, unfortunately, living another very sad hour of its history. The lacerating conflict developed in Kosovo, is causing in the population unspeakable suffering, and is sowing hatred, violence, death. The consequences are dramatic especially for the families destroyed and for the innumerable refugees forced to flee abandoning their houses and any thing they have. I follow closely ... and pray the Lord so that he have pity of his children so strongly tested.... So that the proximity of the Pope to the victims of this tragedy be felt in a more tangible way ... [Msr. Cordes is ordered to go to Albania] to bring to the refugees the my and the whole christian people's contribution of spritual and material solidarity. To children, to mothers, old people [Cordes will tell] that the pope is with them and will always be until a just and long lasting peace will triumph in the Balkans. Too much blood, and tears, those people have seen in this 20th century. May finally arise the long waited for day of peace." [uip] [source: Washington Post, New York Times, March 31] NATO TO EXTEND BOMBING TO BELGRADE, AS BOMBING POLICY FAILS. Both the Washington Post and the New York Times reported Wednesday morning that a meeting of NATO Ambassadors in Brussels on Tuesday night had authorized the expansion of air strikes into downtown Belgrade, to target military and other government buildings. The New York Times reported: "The decision to escalate the attacks came on a downbeat day for NATO, as its commanders received bad news from every direction" -- Serb forces continuing to advance, the refugee crisis spinning out of control, and that air raids have been stymied by a resilient Yugoslav air defense system. The Times also writes: "Alliance officials said the bombing plan was developed months ago when officials expected that a modest raid or two would be enough to nudge a recalcitrant Mr. Milosevic back to the negotiating table." The Times reports that there is "considerable unease about bombing through the Easter holiday this weekend and a strong desire in some NATO countries -- especially Greece and Italy -- to find justification for a pause in the attacks." The Times also says that both the U.S. and its European allies "are eager to find some sort of political solution that would head off calls for a possible deployment of ground troops to stop the fighting." But, despite all the reported unease and dissension over the air strike policy -- the decision was to intensify those air strikes! [ews] [Source: Reuters: "NATO Expands Bombing Campaign in Yugoslavia," by Philippa Fletcher, Belgrade, March 31] March 31--NATO HAS EXPANDED BOMBING CAMPAIGN AND IS NOW SOMEWHERE BETWEEN PHASE TWO/PHASE THREE. NATO spokesman Jamie Shea told reporters in Brussels that alliance Secretary-General Javier Solana had authorized the military to "extend the range and tempo of operations to maximize the effectiveness of the campaign." Supreme Commander General Wesley Clark said in a U.S. television interview that NATO bombers would try to limit civilian casualties, "but there are no guarantees in an operation like this." In London, British Defence Secretary George Robertson told reporters nowhere in Yugoslavia was immune to NATO attacks. And, General Sir Charles Guthrie, chief of Britain's Defence Staff, told the same news conference: "The tempo is heating up." NATO military spokesman Air Commodore David Wilby said warplanes and missiles had hit a full spectrum of targets in the past 24 hours, and had now destroyed or damaged about 30 Yugoslav aircraft. Wilby said NATO aircraft had hit a heliport and vehicle storage depot in Novi Sad, northwest of Belgrade, considrably damaged Nis airfield in southern Serbia, and attacked a police barracks at Kula in Serbia and an army garrison at Pristina. Yugoslavia's official news agency Tanjug said NATO dropped cluster bombs on the outskirts of Kosovo's second largest city Pec, hitting a neighborhood inhabited solely by Serbs. [smt] [Source: Reuters, "U.S. Suggests NATO Air Campaign is Open-Ended," Washington; "NATO Chief Says He Can Bomb More Serb Targets, Washington, and, "NATO Widens Targets to Send Milosevic a Clear Message, by Douglas Hamilton, Brussels, March 31] March 31--U.S. SIGNALS THAT NATO HAS NO TIME-LIMIT FOR EXPANDED BOMBING CAMPAIGN. White House spokesman Joe Lockhart told reporters: "We have no firm timetable on this. This is going to move forward and either President Milosevic is going to change his calculation or we are going to continually and systematically hit his military and deprive him of the ability to impose his will." NATO on Wednesday got the green light to broaden the range of its targets. Appearing on ABC's "Good Morning America" program, NATO Supreme Commander Gen. Wesley Clark said: "I have expanded authority," when asked whether he had greater authority to bomb new targets, including Yugoslav government buildings such as the Interior and Defense Ministries in downtown Belgrade. While Clark refused to discuss specific targets, he said that NATO would be careful to try and limit civilian casulaties, however, the General noted: "But there are not guarantees in an operation like this. There are risks to pilots, there are risks on the ground. Of course, one has to look at the tragedy on the ground unfolding in Kosovo to put this matter of collateral damage into perspective." Asked whether he planned to use his expanded authority soon, Clark said NATO would take "every action available within our means and capabilities" to bring home the war to Yugoslav President Slobodan Milosevic, adding: "At the same time, we will continue to attack, degrade, and disrupt the actions of the Serb military and police forces on the ground." The authorization of which Gen. Wesley Clark spoke came from a restricted meeting of NATO ambassadors on Tuesday, March 30. NATO did not formally escalate the air campaign to the so-called "Phase Three" of operations, which would launch strikes all over Yugoslavia. The ambassadors did not specifically authorize targets in downtown Belgrade such as the State Ministries of Defense and Interior. "My only comment is that NATO planning has always provided for additional operations which Secretary Solana can order to implement," a NATO official said. [smt] ECO-FIN [Source: combined wires] WIESBADEN, March 31--RUSSIA IMPOSES NEW MEASURES AGAINST CAPITAL FLIGHT. On Monday, the Russian cabinet met for a special session on capital flight out of Russia, which Russian Prime Minister Primakov estimated at between $20 and $25 billion per year. He said, "This is a huge sum. The time has long passed when we should have erected a barrier to this, and we will erect a barrier to this." The cabinet announced a limit of $5000 on the amount of hard currency which Russian citizens can take out of the country legally. Before, there had been essentially no limit. On March 31, the Russian central bank announced that it had cut access to the foreign exchange market to four unnamed Russian banks in order to get the buying and selling of dollars under control. The four banks were accused of violating currency regulations and controls. According to the central bank, five other Russian banks had been restricted from foreign exchange trading already last week. (lok) [Source: FT 31.3.99; AiF news agency via FNS] WIESBADEN, March 31--RUSSIA WILL ASK FOREIGN CREDITORS FOR 75% WRITE OFF in respect to its roughly $100 billion Soviet-era debt. This was stated by First Deputy Prime Minister Yuri Maslyukov on Tuesday in an interview with London's {Financial Times}. According to Maslyukov, Russia will open formal restructuring talks on the Soviet-era debt later this year. He said, "We are in a condition to pay the debts of Russia. But we are not in a position fully to pay the debts of the Soviet Union. We would like them to forgive 75% of the debt of the Soviet Union." The {FT} notes that such a proposal had been floated recently by the U.S. administration, but is being strongly rejected by German private and public creditors, which together hold 50% of this debt. At a press conference today, Maslyukov elaborated. He called his statement about the 75% write-off "a trial balloon to international financial organizations," adding "I shall agree to 70%, if you think that 75% is too much." When NTV's reporter demanded why precisely 75%, whereas "the West wrote off 50% of Poland's debt," Maslyukov joked, "Well, if only to be better than Poland," then replied in earnest: "In any case, this is a basis to start discussions. Poland requested the write-off of 100%. Well, we shall begin negotiations, look at the structure of these debts and so on. Perhaps, a part can be rescheduled and put beyond the year 2005 while another part can be written off." At the end of his lengthy press conference covering debt, the IMF, the Russian Development Bank, investment, industry, and ballistic-missile defense [transcript: 99134DMH011], Maslyukov confirmed that World Bank head Wolfensohn will come to Moscow April 14. [LOK/RBD] (Source: AP of 29.03.99) WIESBADEN, March 31 (EIRNS)--ON MARCH 26, THE DAY BEFORE IMF MANAGING DIRECTOR MICHEL CAMDESSUS ARRIVED IN MOSCOW, the IMF released its long long-suspended tranche of $153 million to Ukraine. The move buys time on the Ukraine default question, allowing Ukraine to muddle through the remaining days of the first quarter and into the second quarter. The tranche, which is part of the IMF $2.2 billion loan to Ukraine, had been frozen since last November. Ukraine can now expect to also receive new credits from the World Bank. [kgg] [Source: Handelsblatt 29.3.99] WIESBADEN, March 29--EVER MORE "ALARMING SIGNALS" ON THE EUROBOND MARKET are being noticed by the German daily {Handelsblatt}. Following last week's articles in the German press on the same issue, {Handelsblatt} on Monday devotes an extended article and its lead editorial by chief-editor Klaus Engelen on the very much increased risk on sovereign defaults on eurobonds. The nervousness on eurobonds erupted in particular after Pakistan had recently agreed to demands by the "Paris Club" of government creditors to abolish the first priority status of eurobonds, which means that future debt restructurizations will not only include credits, but eurobonds (bonds issued internationally by a government or a company in other than the national currency) as well. Pakistan has been the "test case" for pushing through this new principle. {Handelsblatt} quotes Moody's, which is speaking of a "paradigm shift" on global capital markets. Before, investors didn't have to worry about their eurobond holdings, even if the debtor had defaulted on foreign loans. The risks in the eurobond market, in particular in the high-yield area, have therefore vastly increased. {Handelsblatt} notes that instead of a few dozen of creditors, as in the case of foreign loans, a default on eurobonds would hit tens of thousands of investors. Each of them could start legal actions against the defaulting entity and any kind of rescheduling would be extremely difficult. And investors are fearing that it's now only a matter of time, when debtors like Russia, Ukraine, Romania, or others could default on their eurobond liabilities. (lok)
