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Show Thursday, January 21. 1999, THE DAILY HERALD, Page D3 Computer, frequency scanners produced in Israeli espionage trial New German government's budget raises spending they made similar pleas to that of Israel's Mossad spy charges of espionage and unauagency. At the time, Cyprus was LARNACA, Cyprus (AP) thorized possession of telecomexpected to receive a shipment of The trial of two Israelis munications Russian missiles; the deployment equipment. accused of spying on Cyprus If convicted, the two face up of the weapons, which Turkey Dpened Wednesday with the to 10 years in prison. opposed, since has been canceled. prosecution presenting radio Their case has strained relaIsrael denies the two men scanners, a laptop computer, tions with Israel, whose growwere spying on Cyprus on llular phones and eight maps ing military cooperation with behalf of Turkey, but has not Df the island seized from the Turkey has become a source of said what they were doing on defendants. serious concern to Cyprus, the island. Former Israeli Udi Hargov and Igal more than a third of which is Prime Minister Shimon Peres Damary were arrested Nov. 6 at occupied by Turkish troops. has implied they were on an the small fishing town of Zigi mission but invaded in Turkey Cyprus m the southern Cypriot coast. 1974 after a brief coup by gave no details. Hie village is near military Greek Prosecutor Cypriots seeking to George installations, and at the time of unite the island with Greece. Papaioannou presented 23 their arrest Cypriot military Turkey since has exhibits to the small Larnaca kept an estisxercises with Greece were mated 35,000 troops in a break- courtroom Wednesday. He said jnder way nearby. away state declared by Turkish the scanners illegal on the The Israelis pleaded inno- Cypriots in 1983. were used to pick up island cent Wednesday to a new When the two Israelis were radio frequencies. The seized charge, conspiracy to spy on arrested, police said they made gear also included cassette Cyprus with intent to harm the repeated calls to a telephone recorders and several batches country's interests. Earlier, number in Tel Aviv, believed to be of computer discs. Germany's presented In its first budget since winning September elections, the ruling coalition of Social Democrats and Greens tried to reconcile constraints on debt and spending with campaign promises to pump more money By TONY CZUCZKA Associated Press Writer BONN, By HAMZA HENDAW1 Germany finance minister a 1999 budget Wednesday that boosts spending to create jobs, improve education and promote solar energy and other projects dear to the center-lef- t government. into social programs. Finance Minister Oskar Lafontaine said the budget struck a balance between pro . Police investigate claims Russia misspent $ 1 0 billion in loans to revive economy In an apparent bid to please By ANNA DOLGOV the IMF, Finance Minister Associated Press Writer MOSCOW Police are investigating claims by interna-;ionlenders that the Russian n government misspent $10 in loans intended to help revive its crippled economy, a p official said Wednesday. First Deputy Prime Minister ifuri Maslyukov made the comments hours before a mission the International Tom VIonetary Fund was to arrive in Moscow to assess Russia's y before deciding whether to jxtend badly needed new loans. Maslyukov, who was in Washington last week for talks n new loans, bristled at the enders' claims. He said an investigation by Russian police would Drove the government's inno-ncthe Interfax news agency eported. He did not identify the al bil-io- econ-)m- e, oans that were allegedly misap-jropriate- d, nor did he give any )ther details of the accusations. The IMF has scrapped a $22.6 million loan package it assembled ast summer to help Russia avert Mikhail Zadornov said Russia will make its scheduled debt repayments in the first quarter of the year while it continues talks on rescheduling the rest of its foreign debts. Russia must repay $493 million in the first quarter of 1999. Zadornov added that he hoped the government could reach a loan agreement with the IMF next month. "Our only interest is to refinance our own debt to the fund'' and not to finance domestic spending, Maslyukov said. IMF officials have said any loans will hinge largely on Russia's ability to approve and put into effect a feasible budget ITAR-Tas- Be a Herald Accent carrier today and t the fun! join Routes are currently available in your area for newspaper delivery. Adults and kids needed. Deliver the paper only one day a week. oans were frozen after Russia ievalued the ruble and defaulted n some of its debts in August. 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Visit any Zions "Darling, 375-510- 3 BI3IBB21BIBIBiaiBIB)BfaiBBMa M fi metis. at Call The Daily Herald The lower house of Russian parliament approved the draft 1999 budget Tuesday, in the second of four required readings. But the IMF has criticized even this austere budget as unrealistic and has faulted Prime Minister Yevgeny Primakov's government for factoring in loans that haven't been promised. Primakov and other officials have said Russia must reach an agreement with the IMF before it can reschedule its foreign debts. Meanwhile, Russia's top pri- i looming economic crisis. The replaced by his deputy, news reports said Wednesday. State Minister Farit Property Gazizullin suffered a heart attack in August and has not s fully recovered, the news agency reported, citing the government press service. moting economic growth and seeking to keep inflation low. He spoke at a news conference after the rest of Chancellor Gerhard Schroeder's Cabinet approved his proposal. 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