Russia: Russian President Boris Yeltsin signed a decree promising to pay all outstanding wage arrears to the armed forces within two months, and to all other state employees by the end of 1997. The debt to all state employees is estimated at Rbs25,600 billion (£2.6 billion).

Bulgaria: Bulgaria will have to import about one million tonnes of wheat to cover a shortfall caused by this year's disappointing harvest and worsening structural problems in the farming sector, according to Ventislav Vurbanov, Bulgaria's Agricultural Minister. Under communism, in the system of collectivised farms, Bulgaria was self-sufficient in wheat and even exported small quantities to other Eastern European countries.

The pace of economic growth in Eastern Europe (excluding the former Soviet Union) is forecast to fall for a second year under the impact of growing balance of payment problems. For the first time since the collapse of communism, however, there will be a positive growth of 1.4 per cent. Growth is slowing in particular in the Czech Republic and Slovakia, and has halted in Romania as a result of this year's austerity package.

Serbia: Borislav Milacic has been elected as the new Finance Minister for Serbia.

Bosnia: Nato troops in Bosnia shot dead a former Bosnian Serb Police Chief charged with war crimes, and siezed another suspect in a dramatic 'snatch' operation.

Estonia: The European Commission (EC) agreed that Estonia and Slovenia will join the Czech Republic, Hungary and Poland in the first wave of countries negotiating to join the European Union (EU).

Lithuania: The Republic of Lithuania became the first Baltic country to issue a publicly offered eurobond. The US$200 million five-year bond was priced to yield 105 basis point-over Treasuries, well below the 200 to 250 basis points the country has negotiated for recent syndicated loans.

Poland: Shares in KGHM Polska Miedz, the Polish copper giant which was listed on the Warsaw Stock Exchange, surged 12 per cent to 23.5PLz in their first day of trading (the initial price was 19PLz), after last week's successful initial public offering, which raised US$1.3 billion. The offer closed with the foreign institutional tranche of 35 million shares: 17 per cent of the company, and 4.3 times oversubscribed. Local investors offered to buy 75.8 million shares in a tranche containing 30 million. A total of 15 per cent of KGHM will go to the 20,000 employees while the Government will retain a 49 per cent stake in the company, leaving foreign institutions with 21 per cent through GDR, listed in London on 10 July. The sale was handled by UBS, BZW and the local Wielkopolski Bank Kredytowy.

Russia: GAZPROM was hit by tax penalties, for late payment of its taxes last year, depressing net income at the giant Russian gas company to Rbs8,980 billion (£900 million).

Hungary: Hungary is to invite tenders in the next two weeks for some 2,000 MW of new private power-generating capacity requiring investment of US$2.5 billion. About 60 per cent of Hungary's 7,500 MW capacity is under private control, including the two US generators, AES and EL Paso.