LUZHKOV CRITICIZES GOVERNMENT'S PRIORITIES. Moscow Mayor Yurii Luzhkov has again criticized the government's domestic policy priorities. In a 1 July interview with RFE/RL's Moscow bureau, he said First Deputy Prime Minister Chubais and his allies have mistakenly made reform of housing and municipal services their top priority. Luzhkov believes the government's main goal should be reviving domestic industry, which he said will make it easier to address other issues, including housing reform. Luzhkov also repeated his opposition to Russian policy toward Ukraine. In particular, he objects to "renting our own city" by leasing port facilities in Sevastopol, where the Black Sea Fleet is based. With regard to Duma Defense Committee Chairman Lev Rokhlin's recent appeal to the president, Luzhkov said he highly respects Rokhlin and understands the hardships in the armed forces but would not "dramatize the situation."

UKRAINIAN PRIME MINISTER REPORTED TO HAVE RESIGNED. Igor Gritsiak, an aide to Prime Minister Pavlo Lazarenko, was quoted by the Russian RIA News Agency on 1 July as saying Lazarenko has tendered his resignation. Reuters, however, said President Leonid Kuchma's office could not confirm that Lazarenko has offered his resignation and said no decree has been issued on the subject so far. Meanwhile, "Eastern Economist" reported on 2 July that according to unofficial sources, Lazarenko was released from the hospital on 30 June. He was hospitalized on 19 June after being diagnosed as suffering from thrombo-phlebitis. The same source said Kuchma has already signed a decree dismissing Lazarenko that will be issued shortly.

WORLD BANK WANTS UKRAINE TO SIGN AGREEMENT WITH IMF. Newly appointed World Bank Director for Belarus and Ukraine Paul Sigelbaum warned Ukrainian President Kuchma on 1 July that the bank will not be able to cooperate with Ukraine in restructuring several sectors of the economy if the country fails to sign an agreement with the IMF, UNIAN reported. Kuchma replied that Ukraine has not yet violated any of its agreements with the IMF and has "even followed the conditions on the size of the budget deficit." He said he is optimistic about the prospects for continuing cooperation with the IMF. The World Bank may disburse about $1 billion for reform of the energy and finance sectors, agriculture, and the government apparatus.

OFFICIAL SAYS UKRAINE CANNOT AFFORD TO CLOSE DOWN UNPROFITABLE MINES. Nikolai Ivanov, an official at the state company overseeing the closure of money-losing mines in Ukraine, told Interfax on 1 July that Ukraine cannot afford to close 40 money-losing coal mines this year, as planned. He said Ukraine has received only a fraction of the money promised for the project. According to Ivanov, shutting the first 28 pits would cost 960 million hryvna ($525 million). He said even if the company receives the 238 million hryvna due under the 1997 state budget, it will be able to shut only five or six mines. The World Bank has given Ukraine the first half of a $300 million loan to underwrite the program of restructuring the coal industry. World Bank Director for Ukraine and Belarus Sigelbaum said after visiting the Donetsk coal mining region that the closure program would go ahead but that its pace may be slowed by lack of funding.

CZECH PRESIDENT VISITS CHORNOBYL. Vaclav Havel on 1 July became the first president from a country other than Ukraine to visit the Chornobyl nuclear power plant, Ukrainian and Czech TV reported. He met with directors of the station and walked the streets of the abandoned city of Prypiat, near Chornobyl. Havel told reporters afterward that the site is a testimony to the lack of mankind's humility in face of nature. At a ceremony where he received an honorary doctorate from Kyiv National University, Havel said he considers Ukraine an integral part of Europe on account of both its history and its values.

ROMANIA BECOMES MEMBER OF CEFTA. Romania officially became a member of the Central European Free Trade Agreement on 1 July, RFE/RL reported. President Emil Constantinescu has described CEFTA membership as a kind of rehearsal for joining the EU. He noted that CEFTA functions in accordance with EU rules and that this will help ease Romania's bid for EU membership. He also said Romania will be able to regain access to Eastern and Central European markets because of its membership in CEFTA. Bucharest signed the necessary accords for CEFTA membership in April. Meanwhile, Vojka Ravbar, CEFTA's current president and Slovenia's state secretary for international economic relations, said he expects membership negotiations with Bulgaria to start later this month. Other current members of CEFTA include Hungary, the Czech Republic, Poland, and Slovakia. Countries that have expressed interest in joining are Latvia, Lithuania, Estonia, Macedonia, and Ukraine.