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Books on Lithuania
Update No: 287 - (29/11/04)
New government forms
Lithuania will have a new centre-left coalition government that includes the
opposition Labour Party under a power-sharing deal concluded on 3 November in
the wake of the inconclusive 24 October elections. Under the deal, the coalition
of the Social Democrats and the Social Liberals will be joined by the Labour
Party of Russian-born businessman Viktor Uspaskich.
In the 24 October elections, the Social Democrat-Social Liberal alliance
garnered 31 seats, the Labour Party 39 seats and the right-wing Conservative and
Liberal Centre Union parties together 43 seats in the 141-seat parliament (Seimas).
The deal would give a bare majority to the new coalition.
"The Labour Party will be just like a partner, but in no way a dominating
force and this will guarantee the continuity of government which is what
Brussels is looking and hoping for," said Prime Minister Algirdas
Brazauskas. His reference was to widespread fears that through his one-year-old
populist Labour Party, Uspaskich would seek to revive Russia's influence in
Lithuania. Uspaskich himself has repeatedly denied this.
Continuity on EU policy preserved
Also on 3 November, the Lithuanian government decided to ratify the new European
Constitution in parliament rather than in a referendum.
Lithuania's new government should ensure continued pro-European Union policy in
the Baltic state. Brazauskas told national radio it was an "agreement to
work together for the benefit of Lithuania," whose future commitment to the
EU and NATO, which it joined this year, had appeared in the balance after Labour
won most votes, but not enough for an outright win.
Brazauskas, who hopes to take the fast-growing country into the Euro currency in
2006/2007, had initially sought an alliance with the Conservatives and the
Peasants Party - but not in one vital matter.
Lithuania has taken over from Bulgaria the unenviable role of being the premier
producer of counterfeit Euro money in Europe. The seizure of nine million in
counterfeit Euros in Kaunas is thought to be just the tip of an iceberg here.
Lithuania's neighbour, the Russian enclave, Kaliningrad, is a major smuggling
centre in Northern Europe and criminal activity abounds there. This has had an
unfortunate effect on Lithuania itself. White-collar crime is rife there.
In most other respects the republic is an exemplary EU entrant. Growth of GDP is
bounding up in high single-figure rates per year. Its $18 billion economy grew
9.7 percent last year, the fastest pace in Europe, and expanded 7.2 percent in
the first half of 2004. Inward FDI is soaring at a similarly giddy pace. Not for
nothing is it becoming known as 'the Baltic tiger.'
Lithuania to build gas pipeline to Russia's Kaliningrad
Lithuania will build a new 63 km long gas pipeline on its territory to
Kaliningrad Region, Jonas Janulionis, technical director of the Lietuvos Dujos
[Lithuanian gas] national operator of gas networks, said, ITAR-TASS News Agency,
German, Polish, Belarusian and Lithuanian companies are taking part in the
tender for the construction of the pipeline's branch from Kaunas to the town of
Sakiai on the border with Kaliningrad Region. Janulionis explained the project
by "the growing scale of energy transit to Russia's Kaliningrad
Region." He said that 600m cu.m. of gas received from Russia's natural gas
monopoly Gazprom will be imported by transit to the region.
The construction of the gas pipeline branch will begin in January 2005. The
project will be funded by Lietuvos Dujos in the hope that "the investments
will be covered by the money received for gas export to Kaliningrad,"
The Ruhrgas German concern owns 38.9 per cent of the Lithuanian company's
shares, Gazprom 37.1 per cent and Lithuania's State Property Fund 17.7 per cent.
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