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lithuania

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LITHUANIA


 

REPUBLICAN REFERENCE

Area (sq.km)
65,200 

Population 
3,610,535 

Principal 
ethnic groups 
Lithuanians 81.3%
Russians 8.4%
Poles 7.0%

Capital
Vilnius 

Currency 
Litas

President
Rolandas Paskas

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Background:
Independent between the two World Wars, Lithuania was annexed by the USSR in 1940. On 11 March 1990, Lithuania became the first of the Soviet republics to declare its independence, but this proclamation was not generally recognized until September of 1991 (following the abortive coup in Moscow). The last Russian troops withdrew in 1993. Lithuania subsequently has restructured its economy for eventual integration into Western European institutions. 

Update No: 267 - (27/03/03)

The new president
The Lithuanians in a turn-up for the book voted out their incumbent president, Valdas Adamkus, despite his having just hosted a trip by Bush in November confirming Lithuanian membership of NATO, an acknowledgement that Lithuania has joined the West.
His victorious opponent Rolandas Paskas, had certain advantages. At 46 to Adamkus's 76, he was much younger. He showed his vigour by flying a plane under a bridge with two other planes, a stunt that seems to have impressed the electorate that he would offer novelty. His campaign was brazenly populist, deploring the often appalling social problems of the country, for which he as president would have no responsibility.

The steady hand at the helm
That is the responsibility of Premier Algirdas Brazauskas, who as a former president himself knows that since independence it is a largely ceremonial job for foreign affairs. Before independence in 1991 (declared in March 1990), it was not, as he knew, because he was also president then and leader of the Communist Party of Lithuania.
This makes him an unusual figure in Baltic state politics, the only one to have been a leading communist who has survived into the democratic era. He has remade himself a Social Democrat and the people know he was almost certainly that all along. It is interesting that the premier of Poland, with which Lithuania has historic ties, is also a former leading communist, Leslek Miller, who has just had to reshuffle his government.
Brazauskas is a pragmatist, who puts Lithuania's interests first. Hence, policy is decided by pursuit of EU entry, now that NATO entry is a certainty. Both are due in 2004.

The valediction of the outgoing president

Adamkus made a farewell speech to parliament. It is notable that, after recounting recent advances he ended on a more poignant note, echoed in a speech made by President Arnold Ruutel of Estonia during his country's recent parliamentary election campaign. The Baltic states have social problems all right; and both presidents, the one remaining, the other going, thought it their duty as symbols of the nation to point them out.
He urged the authorities to coordinate rapid development of the economy with improving the lives of all people, so that all sectors of society feel positive changes. "Positive changes in the economy should also benefit people in the minimum income bracket and those receiving social assistance. The wellbeing of farmers, scientists, teachers, doctors and people working in the cultural sphere should gradually increase," Adamkus said.
Government policy should not leave certain sections of society on the periphery of the country's general development and should relieve social tensions and strengthen civil solidarity in society, he said. Adamkus said he is pleased to say that Lithuania's economy has lately been steadily growing and that more and more Lithuanian residents can increase their spending and savings. However, he expressed regret that a significant part of the population have still not felt positive changes from the economy and their lives have not improved.
He pointed to the fact that incomes of businesses and individuals are rapidly growing in major cities like Vilnius, Klaipeda and Kaunas, while other regions of the country are developing more slowly and experiencing higher rates of poverty and unemployment.
"One tenth of city dwellers find themselves below the poverty line, while over a quarter of villagers line in destitution. Over one third of large Lithuanian families live in poverty, and many of these people live in rural districts," Adamkus noted.

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BONDS

Lithuania issues 10-year Eurobonds

Lithuania has issued €400m worth of 10-year Eurobonds on international markets, the Finance Ministry has reported.
Yield to redemption was 4.65 per cent taking into account coupon yield and placement price. BNP Paribas and Dresdner Kleinwork Wasserstein placed the bonds. Coupon yield is 4.5 per cent. The bonds mature on March 5th 2013. 
In the first phase of placement, demand was double supply; potential investors made bids totalling €800m.
Investors from Germany and Austria bought 45 per cent of the issue.

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ENERGY

Lithuania gives Russia more time to bid for stake in gas company

The Lithuanian government decided on 5th March to extend the deadline for a proposal from the Russian gas company, Gazprom, on the purchase of 34 per cent of state-owned shares in Lietuvos Dujos [Lithuanian Gas] until 11th April, a source in the government's press service told Interfax News Agency.
Gazprom, which is the only participant in the tender for the sale of this block of shares, did not submit a bid on time - by 28th February. Gazprom sent a letter to the Lithuanian government and the state property fund in which it explained the reasons why it had not submitted a final proposal and requested an extension of consultations on the conditions for privatisation.
However, Lithuanian Prime Minister, Algirdas Brazauskas, said a short time ago that everything had been agreed, except for the price. Lithuania has put a price at 116m litas [US$37m] for the 34 per cent stake - the share price at which a similar stake was sold to the consortium of German companies Ruhrgas and E.ON Energie in the spring of 2002. According to unofficial information, Gazprom offered 80m litas for the block of shares and considers this price to be optimal.
Gazprom also considers the requirement that 70 per cent of gas supplied to Lithuania be imported through Lietuvos Dujos unacceptable...
Lithuanian Economics Minister, Petras Cesna, commenting on Lithuanian television, said that he would not see any tragedy if Gazprom does not buy the shares: the gas company has a strategic investor (Ruhrgas), is working at a profit and can continue to work in this way.
The Lithuanian government currently owns 58.36 per cent of shares in Lietuvos Dujos, and the German companies Ruhrgas and E.ON Energie - 35.49 per cent.

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FOREIGN LOANS

EU assigns 12m Euro to Vilnius

The European Union is assigning 12m Euro to Lithuania under the Phare programme for implementation of understandings between the EU and Russia on the transit of Russian nationals to and from the Kaliningrad region via Lithuania.
The Finance Ministry press service said Lithuanian Finance Minister, Dalia Gybauskaite and European Commission delegation chief Michael Graham signed a fiancé memorandum on the Kaliningrad transit programme. In accordance with understandings, in 2004-2006, the EU will assign 40m Euro to Lithuania for the Kaliningrad transit project.

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TELECOMMUNICATIONS

Telecentres clinches network deal with Lietuvos Telekomas

Telecentres, a Latvian telecommunications company, and Lietuvos Telekomas, the biggest fixed line telecommunications operator in Lithuania, have agreed a deal whereby networks of both companies will be united, the director of Telecentres announced. BNS News Agency quoted Edgars Ricevs as saying that companies at the initial stage will cooperate in the Internet sphere with Telecentres buying from Lietuvos Telekomas access to international Internet network, charging lower tariffs than today in Latvia.
Ricevs said the interconnection agreement between the two companies, operating branches in the neighbouring country, have an opportunity to build a united corporate network, closing agreement with only one telecom operator - Lietuvos Telekomas in Lithuania and Telecentres in Latvia. Ricevs said the agreement with Lietuvos Telekomas is non-exclusive and Telecentres is interested in cooperation with other Baltic states and Scandinavian telecommunications companies. Telecentres will not launch direct operations in Lithuania but will offer its services there through Lietuvos Telekomas. Telecentres has five wireless broadband access system base stations in Latvia, including three in Riga, and one each in Jelgava and Ventspils. 

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