For current reports go to EASY FINDER




Area (


ethnic groups 
Lithuanians 81.3%
Russians 8.4%
Poles 7.0%



Rolandas Paksas


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: 271 - (24/07/03)

Lithuania is a key state in the geopolitics of Central Europe, despite its small size. It is the pivotal state in the enlargement of NATO eastwards into the Baltic states, with Russia's enclave Kaliningrad, bordering Poland and Lithuania on the Baltic shore.

Agreements with Russia
Russia and Lithuania have signed various accords to envisage access to the enclave for Russians on a visa-free basis. But an essential pre-condition is that a hand-over of illegal immigrants is agreed first.
Kaliningrad, the capital of the enclave, has long been a prime conduit for mafia smuggling of stolen cars from the EU, notably Germany, to Russia and of much else besides. A tightening of border controls would be a key precondition for visa-free travel. The idea is to speed up travel for ordinary travellers, while apprehending criminal elements.
A similar agreement was signed in June with Belarus, with similar qualifications.

Re-integration with the West
The main focus of Lithuania's foreign policy, however, is alignment with the West. It is following Poland in forging close ties with the US, ahead of NATO inclusion in spring 2004, the date of its inclusion into the EU.
It is sending a token force of over 100 volunteer soldiers to the Gulf to take part in stabilisation efforts in Iraq, most of them in the Polish sector of Iraq under Polish leadership.
The Germans have baulked at accepting Polish leadership in their contribution to post-war Iraq stabilisation. Not the Lithuanians, who actually were joined in the Union of Lublin with Poland from 1569 for several centuries.
Lithuania will be a reliable partner for NATO, President Rolandas Paksas has said. Speaking with NATO Military Committee General Chairman, Harald Kujat, in Lithuania, Paksas noted: "Lithuania is not merely seeking to take advantage of the security guarantees provided by NATO and the privileges of members. Lithuania is prepared to make an active contribution to defending the values of freedom and democracy in any spot of the world." 
All Lithuanian political parties support the commitment to spend two per cent of the country's GDP for defence purposes. Lithuania is successfully implementing a schedule for adapting its armed forced to NATO standards, he said. General Kujat said Lithuania has made great progress in reforming its armed forces, and its contribution to world security will hopefully be significant. 

Vilnius and Warsaw want EU to help link power grids
Lithuania and Poland are asking the European Union for financial help to link the power grids of the two countries. Lithuanian Prime Minister Algirdas Bazauskas and his Polish counterpart, Leszek Miller, sent a letter to European Commission President Romano Prodi asking him for help.
"This project will not only link the power grids of Lithuania and Poland, but will also link the grids of the Baltic states with those of Western Europe, and so will create a common EU power grid," the letter said.
It said that a consortium of consultants headed by IPA, a British company, prepared the unification project at the EU's request. In order to implement the project, the consortium recommended attracting an EU grant of up to 60 per cent of the necessary investment.
Preliminary calculations put the cost of carrying out the project at 434m Euro. The money will be used for linking the Lithuanian and Polish power grids, and modernising the power grids of Lithuania, Latvia, Estonia and Poland to enable them to function in the unified state. 

« Top


Lithuanian, Polish premiers ask EU's Prodi for help in connecting power grids

In a joint letter, the Lithuanian and Polish prime ministers have addressed the chairman of the European Commission, Romano Prodi, and requested the European Union's assistance in connecting Lithuanian and Polish power grids, Lithuanian Radio has reported.
Meanwhile, the Seimas [parliament] chairman, Arturas Paulauskas, who was ending his three-day visit to Poland, said that, as the document had been signed, there were good grounds to expect the EU's financial aid in constructing a power bridge.
Paulauskas said: "The visit has been a kind of evaluation of the start of a new stage [in bilateral relations] and a checking of common trends and guidelines. [We have heard] two good messages during the visit: firstly, the [Polish] parliament has begun the ratification process related to our accession to NATO and, secondly, the government signed a joint letter to Romano Prodi, the European Commission's chairman, on a bilateral project aimed at constructing a power bridge and connecting the Eastern and Western energy systems.
"The letter should help to find money for the project and, I believe, one of the financing sources could be the EU's structural funds."

Klaipedos Nafta oil product exports drop 15% in H1

Oil product exports by Lithuanian oil terminal Klaipedos Nafta fell 15.3% year-on-year to amount to 3.39m tonnes in January-June 2003, company press secretary, Ramune Visockyte said, New Europe reported. She said that in June this year the terminal exported 446,900 tonnes of oil products, down 3.95% year-on-year. Visockyte explained that exports of oil products fell mainly due to a drop in world prices and reduced consumption in the summer season. Klaipedos Nafta increased oil product exports 30.2 % year-on-year to 6.7m tonnes in 2002. The terminal plans to export seven million tonnes in 2003. State property management company Naftos Terminalas owns 94.99% of Klaipedos Nafta shares.

SPF puts 85.72% of Mazeikiu elecktrine on the block

Lithuania's privatisation commission has given the go-ahead to a programme for the state's sale of power plant Mazeikiu elektrine, the country's state property fund said, Neww Europe reported.
The programme sets the starting price for the stake at 15bn litas. Potential buyers will be legal entities with at least three years of successful experience in energy and annual turnover of at least 200m litas. Bids will be accepted on September 17th-18th. Company privatisation documentation will be worked up from July 15th to September 15th.
Mazeikiu elektrine will be the second privatised Lithuanian electric power station. A consortium led by Russian gas monopoly, Gazprom, bought 100% of the stock in the Kaunas thermal electric station this spring.
Mazeikiu elektrine was turned into an independent enterprise as a result of the reorganisation of the power company, Lietuvos energija. Its charter capital is 28.713m litas. In addition to the state's 85.72% stake, Germany's E.ON Energie owns 10.9% of the power station's stock. The company turned 2.6m litas of net profit last year. It supplies power to the oil refinery Mazeikiu nafta. 

« Top




Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of clients or by access to one of our existing specialised reports. 
For further information email:

Considering an investment or a trip to any newnation? First order our Investment Pack which will give you by e-mail the last three monthly newnation reports and the complete worldaudit democracy check for the low price of US$12. The print-out would be a good companion to take with you. Having read it, you might even decide not to go!
To order please click here:
Investment background report

« Top

« Back


Published by 
International Industrial Information Ltd.
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774