
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, March 8, 1990                   TAG: 9003082161
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A/8   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: MOSCOW                                 LENGTH: Short

SECESSION BY LITHUANIA COULD COST COUNTRY BILLIONS

President Mikhail Gorbachev has demanded that Lithuania pay the Kremlin billions in hard currency if the republic goes ahead with its plan to secede from the Soviet Union, the Baltic republic's president says.

The demand for compensation came in a meeting with Lithuania's president, Algirdas Brazauskas, ahead of an expected weekend vote on secession in the republic's parliament.

Vilnius Radio put the figure at $34 billion, saying the money would cover investments Moscow has made in Lithuania since forcibly annexing it in 1940. Lithuanian nationalists say the Kremlin has it backward, and should pay them for a half-century of exploitation.

Brazauskas, who also heads the republic's breakaway Communist Party, told Lithuanian television Wednesday night that there was no need "to frighten ourselves and others" about the economic consequences of secession.

In a Tass report on the interview, Brazauskas said Gorbachev told him during the meeting Monday that if Lithuania proclaims independence, "economic relations would have to be legalized as relations between two independent states, and accounts between them will have to be settled in freely convertible currency."

The Soviet ruble is not convertible, meaning its value is set by the government rather than through trading on world markets.

The official Soviet news agency quoted Brazauskas as saying that having to pay in convertible currency "would be an extremely difficult task for the republic to accomplish," since it imports fuel, metallurgical products and raw materials from the Soviet Union at about three times lower than world prices.

by CNB