VILNIUS, Sept 23 (Reuters) — Lithuania, which is assessing options for a new nuclear reactor, will become heavily dependent on Russia for energy if it fails to replace its Soviet-built nuclear plant, a NATO-sponsored workshop was told on Monday.
      Lithuania is closing the Ignalina plant for the sake of entry into the European Union, which considers the facility unsafe as it has the same design as Ukraine's disastrous Chernobyl plant.
      With an eye to completing EU accession talks this year, paving the way to join the bloc in 2004, Lithuania has pledged to shut down one reactor by 2005 and the other in 2009.
      Joseph Bader, one of the workshop's directors, said closing Ignalina will leave the country -- along with Baltic neighbours Latvia and Estonia -- heavily dependent on Russia for electricity or for the fuel oil and natural gas needed to run conventional power plants.
      "There's an energy security issue here and an economic stability issue. You don't want a region that is tied to one source," Bader told Reuters.
      Lithuanian President Valdas Adamkus welcomed the three-day workshop as a sign of increasing cooperation with NATO, noting that its conclusions would help to define future energy policy.
      "We have to consider and project all possible options for a new nuclear power plant," Adamkus told the gathering of nuclear specialists.
      The former Soviet Baltic republic hopes to be invited to join NATO at the defence alliance's Prague summit in November.
      But with a price tag that could easily reach $2 billion, building a safe and modern reactor in Lithuania would only be possible if the three Baltic states joined efforts and managed to attract enough foreign investment, said Lithuanian Energy Institute head Jurgis Vilemas.
      He expected public opinion would support the ambitious project, citing estimates that 65 to 70 percent of Lithuanian residents were in favour of nuclear power.
      Viktor Sevaldin, who has run the Ignalina plant ever since Lithuania regained independence in 1991, said a new reactor would be the ideal solution to all the problems that current decommissioning was causing.
      He called for Lithuania's government and parliament "to officially invite Western companies to take part in this project."
      The availability of a site for the new facility as well as significant usable infrastructure and staffing would all help attract investors, and could give the state a stake of up to 25 percent in the venture without spending a cent, Sevaldin said.
      Representatives of the U.S. Department of Energy and of the nuclear energy industry from Canada, the U.S., UK, and Japan were due to address the forum.

      WARSAW, Poland (Reuters) — NATO defense ministers on Wednesday rebuffed Russian concerns over the alliance's plans for enlargement and the problem of Chechen rebels that Moscow says are hiding in Georgia.
      "It was a polite and affable meeting, nobody banged the table," a NATO official said after a meeting between Defense Minister Sergei Ivanov and alliance defense ministers in Warsaw.
      "But on both points the Russians were politely rebuffed."
      Russian President Vladimir Putin has softened Moscow's criticism of NATO plans to expand eastward as part of his broad pro-Western policy. But there are still misgivings in Moscow about the U.S.-dominated alliance expanding to Estonia, Latvia and Lithuania, which broke free from the Soviet Union in 1991 after a 50-year occupation.
      The Baltic states are among seven countries expected to be invited to join NATO when the 19 alliance leaders meet in Prague, Czech Republic, in November.
      The NATO official said that Moscow wants the three countries to commit to the Conventional Forces in Europe treaty before joining the alliance, expected in early 2004.
      Signed in the dying days of the Cold War, the CFE limits the number of battle tanks, heavy artillery, combat aircraft and attack helicopters deployed and stored between the Atlantic Ocean and Russia's Urals Mountains.
      The Baltic states have not signed up to the CFE and so are not subject to legal restrictions on forces deployed in their territory, which could theoretically belong to NATO once they become members of the alliance.
      Russian military officials in particular fear these states may become NATO outposts for nuclear weapons or army bases.
      Defense Secretary Donald Rumsfeld told a news conference after the meeting that he did not see any linkage between NATO enlargement and CFE, and he did not know of any NATO countries that did.
      "Statements were made by the Russians and statements were made by the others," he said. "The obvious conclusion is that there is no linkage between the two."
      Part of the problem is that new accessions to the CFE can only take place once all signatories have ratified amendments to the treaty which were adopted in 1999, and so far only two countries have done so.
      NATO officials said that Ivanov also sought at the meeting in Warsaw to draw parallels between Iraq and the Chechen rebels Moscow says are operating in lawless areas of Georgia.
      Russian media has speculated that Moscow is seeking a free hand from Washington to wipe out Chechen hide-outs in return for backing U.S. calls for tough action against Iraq in the U.N. Security Council, where Russia holds a veto.

      HELSINKI, Finland (AP) — Declaring that women all over the world face discrimination, President Tarja Halonen on Thursday opened an international conference of women business leaders who were meeting to increase ties and discuss their success in male-dominated businesses.
      Halonen, Finland's first woman president, said that although human rights "are in principle the same for all individuals, they are not implemented equitably."
      "In all countries, women and girls face a variety of obstacles ... (which) include a weaker economic status, as well as culture and economy-related factors," she said to a standing ovation.
      About 200 women business leaders from the United States, Russia, Finland and the three Baltic states of Estonia, Latvia and Lithuania were meeting for the first time to talk about survival and success in the female business community.
      Jorma Ollila, the chief executive of Nokia, the world's largest mobile phone company, related how net sales in the networks division of the Finnish group had grown nearly 200-fold in 20 years with a woman, Sari Baldauf, at its helm.
      The only man to address the gathering, Ollila urged the women business leaders to heed each individual employee.
      He said that part of Nokia's success was because the company, with more than 50,000 employees in 54 countries, had a "good team that could challenge the competition."
      "If a company which grows to be big does not pay attention to people so that they can be true entrepreneurs within that large organization, then that organization is doomed to failure," Ollila said.
      One of the main instigators of the two-day conference, U.S. Ambassador Bonnie McElveen-Hunter, said the 50 American women present represented companies with total annual sales of $125 billion and 2.3 million workers.
      "And just to show that we are all searching for a balanced life, we also have 113 children and 28 grandchildren," she said to laughs and applause, standing in front of the flags of the six nations.
      Tami Longaberger from Newark, Ohio, runs a family company of the same name that began with basket weaving and has now expanded to pottery and other kitchen ware.
      She said that the summit of women business leaders provided a good meeting point and a "unique opportunity to advance market growth."
      "In general, at many business summits women are an oversight. They may not be seen," said Longaberger, whose firm is listed as the 22nd largest woman-owned company in the United States and is on the Forbes list of 500 largest private companies.

      DAUGAVPILS, Latvia, Sept 29 (Reuters) — Raped and abandoned at the age of two, "Nikolai" now lives in an orphanage in a Latvian city dominated by ethnic Russians many of whom have lost hope and taken to a life of crime or alcohol.
      As this Baltic nation prepares for elections on October 5, ethnic Russians say that neither the prospect of European Union membership nor of joining NATO will lift the stamp of second class citizenship cast on them since the end of the Cold War.
      Nikolai, an ethnic Russian boy, was found raped and battered by an unknown assailant a few months ago.
      He now seems to be recovering well after a spell in hospital and stretches his arms in the air and shouts for joy at the children's home in Daugavpils. But his ethnicity might add an extra burden when he grows up, people in the city said.
      "Life in Daugavpils is very difficult and people are poor," said the ethnic Russian director of the children's home in Daugavpils which houses Nikolai and 99 other children of Russian descent.
      Daugavpils, nudging the Russian border in southeast Latvia, used to pride itself on keeping the wheels of the Communist planned economy moving, feeding the Soviet Union with train engines, motor chains and chemicals.
      Now Latvia's second-largest city with 113,000 inhabitants is a gloomy place and many of its giant factories are vacant.
      The Russian immigrants who came here to work now face unemployment, widespread alcoholism and intolerance from many Latvians, who regained independence in 1991.
      "It's not true that all of us were crying back in 1991, but my fear back then was that Russians would be discriminated," said Andrejs Kovalovs, editor of the Russian-language daily Dinaburg and a community leader in Daugavpils. "And our ethnicity does indeed work against us.
      "But the real problem here is that people have lost hope," he added. "They don't expect any improvements in the economy or in the attitude of Latvian nationalists."
      TENSION PERSISTS
      There have been no clashes with ethnic Russians since 1991 despite resentment felt by many Latvians after five decades of Soviet rule, which brought waves of Russians who took over Latvia and ran it to Moscow's dictates.
      Now some of the 680,000 Russians, around a quarter of Latvia's population, say they fare worse in the job market. Official statistics show that Russians make up 35 percent of Latvia's unemployed.
      But many point to the huge regional differences within Latvia. In the mainly Russian Daugavpils district the official unemployment figure at the end of August was 17.5 percent, more than twice the national average of 7.9 percent.
      In Latvia's small political establishment, all are jubilant about the tiny country's "return to Europe" -- expecting a NATO invitation in November and EU membership by 2004. But they are short on words when it comes to ethnic Russians.
      All elections in Latvia since 1991 have returned centre-right coalitions to power apart from a brief social democratic interlude, and October 5 looks to be no different.
      Former central bank chief Einars Repse and his conservative New Time party looks likely to form a new coalition, with the left-wing again left out in the cold and no voice for Russians.
      Russian-interest parties in Latvia have existed throughout the transition period, but must shout from the sidelines since they are confined to a life in opposition.
      Western worries about the plight of Russians living within Latvia's borders are often pushed under the carpet by the elite, and sometimes seen as an embarrassment or even as an insult, Kovalovs said. The establishment in Riga disagrees.
      "We do not have ethnic tension, but political tension," said Artis Pabriks, a political science professor who is running for the right-wing People's Party in the general election.
      POLITICAL APATHY
      Daugavpils was seen by many as an extremist hotbed after a 16-year-old girl from the city tried to slap Britain's Prince Charles with a bunch of carnations last year during a visit to Latvia.
      But ethnic Russians in the city said NATO membership looked like a done deal and that no one had the time or energy to worry about Latvian EU membership.
      "Nobody here gives a damn about whether we enter the EU or not. When you are struggling so hard to make ends meet, those kinds of discussions quickly become irrelevant," Kovalovs said.
      At the children's home, the director pointed out across the ward for those aged 2-5 and said the 21 children there were a direct result of the social and economic hardship of Daugavpils.
      "It leads to depression and many people lose themselves in booze," he said.
      "They then lose their flats or turn them into places full of thieves and drunks, and that is when we get the children -- either out in the streets or in one of those dens."
      Patting Nikolai on the head, his said the boy's future was most uncertain as there was no chance of reuniting him with his mother and bring him back to normal society.
      "I met her just once but there is no point as she is far from a reasonable person, and her male friend was even worse."

      BRUSSELS, Sept 30 (Reuters) — Candidate countries lining up for EU membership should see their farm sectors become more competitive during the accession process but there is still much room to improve structure and quality, the OECD said on Monday.
      In a report on agricultural policies in Russia and six central and east European countries, the Organisation for Economic Co-operation and Development told these nations to complete land reform, invest in market infrastructure and meet EU veterinary, sanitary and phyto-sanitary requirements.
      Progress in these areas, among others, would boost farm productivity in economies that are still in transition after decades of centrally planned communist control. Preparations for EU accession would also raise efficiency.
      Along with Russia, the countries reviewed by the Paris-based OECD were Bulgaria, Estonia, Latvia, Lithuania, Romania and Slovenia. These six rank among the 10 candidate countries (CEECs) that hope to become full members of the European Union.
      Of these, the three Baltic states look set to accede in the next wave of expansion, probably in 2004, while Bulgaria and Romania are keen to join later in the decade.
      "Investment in market infrastructure, improved quality standards and institutional reforms are areas of the highest priority," the Paris-based OECD said in its report.
      "The EU accession process for the CEECs and future WTO membership for Russia provide significant policy stimulus whose effects are likely to make the agricultural sectors of these countries more competitive over time," it said.
      It advised the six central and east European nations to focus in the short to medium term on the structural adjustments needed to achieve higher productivity and raise competitiveness.
      FOCUS ON QUALITY
      In 2001, the candidate countries had seen greater tariff quotas and new concessions for processed products and wine as part of opening their markets to the EU, the OECD said.
      A second liberalisation phase, which began late last year, gave great potential for their cereal, beef and dairy exporters. But quality standards were key to maximising farm trade with the EU and halting widespread deficits in agro-food trade balances.
      All the countries under review posted agro-food deficits with the EU in 2001, the report said.
      "The extent to which the CEECs would benefit from the liberalisation of trade with the European Union will depend on their ability to comply with the quality standards of the EU market," the OECD said.
      While the value of agro-food exports increased in all the nations in 2001, agriculture's share of GDP, relative to other sectors, continued a downward trend seen for 10 years in countries such as Estonia and Slovenia.
      However, the next major issue will be the amount of direct payments and production quotas that are still to be hammered out between the European Commission and the candidate countries.
      This remains a highly sensitive area, and EU member states have still to reach a common position on the matter, which is expected at a summit in Brussels in late October with accession talks to be concluded, in theory, by the end of the year.
      While the Commission wants to phase in direct payments over a 10-year period starting in 2004, at 25 percent of the amount received by farmers in current member states, the candidate nations insist they should be treated equally from the start.
      They also complain that the annual quotas proposed to them by Brussels are unrealistically low -- raising the spectre that they might be forced to import. One area cited as problematic is milk, where the EU wants to avoid creating a surplus milk lake.

      NEW YORK, Sept 30 — The overall stable rating outlook for Latvian banks reflects the sector's improving financial fundamentals and the positive impact of the presence of foreign strategic investors on the institutions' credit practices, reports Moody's Investors Service in its new Banking System Outlook for Latvia. However, it also takes account of the relatively high proportion of non-resident deposits - a potential source of instability - and the country's economic vulnerability to external shocks, Moody's notes.
      "For Latvian banks, 2001 was characterised by healthy asset growth and improved profitability that strengthened financial fundamentals and underpinned the sector. These trends have continued into 2002, as the economy has continued to perform strongly," explains Edward Vincent, Assistant Vice President - Analyst and author of the report.
      A notable feature of the Latvian economy in recent years, since its recovery from the 1998 Russian crisis, has been the increasing ability and willingness of Latvians to purchase or invest in their own homes. This has led to strong growth in commercial banks' mortgage lending volumes, which Moody's expects to continue.
      "In the context of an emerging economy environment, Moody's views the overall credit quality of the Latvian banking sector as satisfactory, despite the strong asset growth. In particular, we note the positive influence of foreign strategic investors, which has helped the banks improve their credit practices," Vincent says.
      Although Latvia's economic reliance on Russia and the CIS has diminished significantly since the 1998 crisis and as the nation has become increasingly oriented towards EU states, Moody's believes it remains vulnerable to the economic fortunes of its trading partners, pending closer political and economic integration with the EU. Any such economic shock would have obvious negative implications for the banking system, the report observes, in particular given the relatively high proportion of non-resident deposits, which may be withdrawn in a shock scenario.
      However, Moody's notes positively the strong growth in demand for banking products in Latvia - a move encouraged by the government - and the expected surge in take-up of more sophisticated and electronic products, in particular. Such growth will have the beneficial effect of boosting the proportion of resident deposits, the report explains.

      LUOSTO, Finland/BRUSSELS, Sept 27 (Reuters) — The European Union and Moscow fired fresh salvos on Friday in their row over travel rules for residents of the Russian enclave Kaliningrad which will be surrounded by the bloc after enlargement.
      Russian Prime Minister Mikhail Kasyanov lashed out at EU proposals, which include a special travel "pass" and the possibility of introducing high-speed sealed trains.
      Kasyanov's criticism comes three days before EU foreign ministers are due to debate ways out of the diplomatic spat.
      President Vladimir Putin also voiced his doubt about the plan on Thursday in a telephone conversation with European Commission President Romano Prodi, an EU spokesman said.
      Kasyanov linked the issue to future relations with the Union and the prospect of visa-free travel between Russia and the EU.
      "Since the EU and Russia have a strategic partnership, we should strive for the highest possible level of integration," he said on a visit to Russia's EU neighbour Finland on Friday.
      He said this included free movement of citizens across borders and that Russia was ready to move quickly in this direction.
      The Baltic enclave of Kaliningrad, which has about one million inhabitants, will be surrounded by EU territory once its neighbours Poland and Lithuania join the bloc, probably in 2004.
      The European Commission, the EU's executive, has proposed a special travel "pass" for Kaliningrad residents and dangled distant prospects of a non-visa regime for travellers in special trains.
      But Kasyanov said Russian citizens should not have to ask a foreign power for permission to travel to another part of Russia. He said the plan merely amounted to repackaging the concept of old-style multi-entry visas.
      "The proposals that the European Union has given us are the kind that will not solve the problems of Kaliningrad," he told reporters near the Russian-Finnish border.
      Commission spokesman Jonathan Faull told a news briefing in Brussels that Putin had said "he was not fully satisfied with the Commission's proposals."
      EU DIVIDED
      EU states are divided on how much travel freedom should be given to residents of the impoverished Kaliningrad, where the crime rate is much higher than in the EU.
      Some members, led by France, believe the bloc should immediately launch a study on the feasibility of non-stop trains between Kaliningrad and Russia proper, through Lithuania, which would provide sufficient security for visa-free travel.
      Lithuania generally opposes the idea without proper safeguards and some EU states fear the trains would become a gateway for illegal immigrants and smuggling.
      "Some in the EU are really scared about giving Russians visa-free access to EU territory," said an EU official.
      Finnish Prime Minister Paavo Lipponen told a joint news conference with Kasyanov that his government backed the proposal and rejected any linkage to broader visa-free travel between Russia and the EU.
      "The Union is not prepared to negotiate these issues now, nor should they be linked to the Kaliningrad issue," Lipponen said. "Nor is discussing visa-free travel any help in solving the Kaliningrad problem."
      If EU foreign ministers fail to adopt a common stance on Monday, as appears likely, EU leaders will try to break the deadlock during an October 24-25 summit in Brussels.
      The EU wants to end the impasse with Russia before a summit with Putin in November. Membership talks with the 10, mostly eastern European EU candidates, are due to end in December.
      Russia's special envoy in charge of Kaliningrad, Dimitry Rogozin, chided the Commission this week for suggesting that trains through Lithuania go too slowly to allow visa-free travel.
      "For them, a train travelling at 60 or 70 kilometres per hour would enable illegal immigrants to jump out of the window," Rogozin said. "I think there are only three people in the world who could manage this -- James Bond, Batman and Terminator."