RUSSIA, BELARUS, ET AL TO FORM EU OF THE EAST? Delegates to the Parliamentary Assembly of the Union of Belarus and Russia have approved a draft document outlining the organization's border policy, which envisions a visa valid for the entire territory of the union. According to ITAR-TASS on 3 November, Russia will provide more than 20 million rubles ($1.3 million) and Belarus 9 million rubles to the Union's 1999 budget. Russian State Duma Speaker Gennadii Seleznev, who is attending the assembly in Yaroslavl, told reporters that he favors a national referendum in Russia on the question of a union of Russia, Belarus, and Ukraine. Seleznev said he does not rule out the idea of Yugoslavia joining the union at some point in the future and added that he thinks Bulgaria will also likely want to join. Europe long ago started to integrate, he said, and "we should also think about integration." JAC

IMF URGES KYIV TO REVISE 'OPTIMISTIC' 1999 DRAFT BUDGET... John Odling-Smee, the IMF's top negotiator in talks with Ukraine, said in Kyiv on 3 November that Ukraine's 1999 draft budget is "overly optimistic" and urged the Ukrainian parliament to revise it, AP reported. The draft budget forecast a deficit of 0.6 percent of GDP, revenues of 22.5 billion hryvni ($6.6 billion), expenditures of 23.18 billion hryvni, and a 1 percent growth in GDP. Odling-Smee said that both revenues and expenditures should be downgraded. He added that further IMF credits to Ukraine imply a decrease of budget expenditures, the abolishment of state non-budget funds, and the "optimization of taxation," dpa reported on 3 November. JM

...WHILE KUCHMA AIDE SAYS GOVERNMENT DOING 'AS MUCH AS POSSIBLE.' President Leonid Kuchma's aide Valeriy Litvytskyy said the government is seeking to attract credits by putting the 1999 budget deficit at 680 million hryvni and by "lowering state consumption as much as possible," Interfax reported on 3 November. Litvytskyy added that Ukraine want to discuss with the IMF a possible money emission. He said that a possible emission could be via commercial banks and that its inflationary consequences would be "minimal." Litvytskyy also stressed that the current limitations on the purchase of hard currency in Ukraine--which is in violation of Ukraine's commitments to the IMF--"will not last longer than a month." JM

UKRAINE'S INFLATION GROWS IN OCTOBER. Litvytskyy told Interfax on 3 November that inflation last month amounted to 6.3 percent, compared with 3.8 percent in September. He added that the government expects inflation to slow down in November owing to the currency stabilization program adopted in October. Inflation in the first 10 months of 1998 totaled 12.8 percent, esceeding the government target of 12 percent for the whole year. "This is not the worst price we could have paid for the financial crisis in the region," Litvytskyy commented. JM