Books on Lithuania
Update No: 284 - (27/08/04)
Musical chairs at the top
The scandal in Lithuania about the goings-on of former president Rolandas Paksas,
who resigned in March, created for a while a cloud over the legitimacy of the
government, because Algirdas Brazauskas, the premier, was formerly the communist
president of the country'. Nevertheless, he was the one who declared
independence of the Lithuanian Communist Party from the Soviet Party in 1990, a
move supported by Yeltsin and one of the key events leading to the break-up of
Paksas had been compromised by too close an association with a Russian
businessman of dubious KGB and mafia connections, Yuri Borisov. Brazauskas of
course had intimate dealings with the Russian elite in Soviet times. He must
have wanted to clear himself of the slightest suggestion of being in the shadow
of the Russians and his government resigned on July 12th to see if it would meet
with the approval of the parliament and new president, Valdas Adamkus.
Brazaskaus wins new confidence
Adamkus on July 15th issued a decree confirming the makeup of a new Lithuanian
government, led by Brazauskas. Adamkus formally nominated Brazauskas as the
candidate for the head of the new government and submitted the proposal to the
congress for approval.
The congress approved the nomination of Brazauskas; and also the list of
ministers for the new government. All ministers from the previous government
stay unchanged in the new government.
The new government will focus on the issues of obtaining assistance from the
European Union and drafting a budget for next year. Adamkus said he hoped
Brazauskas and his government could proceed with the "constructive
work" already started and he will be a reliable friend to the new
A series of scandals rock the boat
In fact a series of political upheavals over the past 15 months has generated
intense interest in politics - and considerable public anger. In the latest
scandal, newspapers have disclosed details of secret service recordings of
telephone calls between leading politicians talking about allegedly corrupt
payments to party funds. Representatives of all four main parties are involved,
including the centre-right supporters of Adamkus and Brazauskas.
An investigation by the public prosecutor has been blocked by a parliamentary
vote granting immunity to the suspect members of parliaments. But the public
remains angry, not least at the expletives peppering their MP's discussions.
"Everybody sitting on the beach is reading this. The reputation of our
politicians is low and every scandal makes it worse," says Raimundas Lopata,
director of the institute of international relations and political science at
While allegations of political corruption raise questions everywhere, the issue
is particularly important in Lithuania and other new democracies in Eastern
Europe because institutions that can check the excessive influence of money in
politics - such as the courts - often lack authority.
In Lithuania, the added twist is the influence of Russia. Even though Lithuania,
like nearby Latvia and Estonia, joined Nato and the European Union this year,
Moscow has still not fully come to terms with the loss of the ex-Soviet
Lithuanian conservative politician believes, the Russian capital jeopardizes the
The Lithuanian opposition has had an unusual reaction to the arrest of Yukos's
CEO Mikhail Khodorkovsky. Andrjus Kubiljus, leader of the conservative
opposition party, suggested the Lithuanian government should buy back Mazeikiu
Nafta's stocks from Yukos and suspend negotiations with Gazprom regarding the
sale of 34 percent of Lietuvos dujos's stocks.
The Lithuanian government owns 58.36 percent of Lietuvos dujos's stocks and
35.49 percent is owned by Ruhrgas and E.ON Energie. In September, the government
of Lithuania agreed to sell 34 percent of Lietuvos dujos's stocks of Gazprom for
28.6 million euro. However, the terms of the contract are still being
negotiated. In 2002, Lietuvos dujos's sales volume made up 116 million euros,
the net profit made up 16.5 million.
Mazeiki Nafta consists of the Mazeiki refinery (with a capacity of 12 million
tons of raw material a year), the marine export terminal Butinge (eight million
tons a year) and the Birzai arterial oil pipeline. The Lithuanian government
owns 40.66 percent of the concern's stocks. In 2002, Yukos purchased 53.7
percent of Mazeikiu Nafta's stocks and hired American citizen Nelson English to
govern the concern, RusEnergy reports.
"The Lithuanian authorities are supposed to realize the situation with
Mazeikiu Nafta - they are not supposed to succumb to illusions and affirmations
of success," former Lithuanian Prime Minister Andrjus Kubiljus said in a
statement. "The government is supposed to be prepared for force-majeure, if
the company Yukos is completely destroyed or divided," the politician said.
The Vedomosti newspaper wrote, the leader of the conservative party called upon
the government of the state of stop negotiations with Gazprom about the sale of
34 percent of Lietuvos dujos stocks. Kubiljus said, the parliament and the
government "must evaluate the scale of Lithuania's national security, if
the Russian capital is actively implicated in the energy industry of
Russia and Lithuania settle border issues
On Wednesday, May 21st, The State Duma ratified two agreements between the
Russian Federation and the republic of Lithuania regarding the
Russian-Lithuanian state border and about the exclusive economic zone and the
continental shelf of the Baltic Sea. Two hundred and sixty-eight deputies voted
for the ratification of the document, 138 deputies voted against it and one
The two documents were signed on October 24th, 1997 in Moscow by Russian and
Lithuanian presidents Yeltsin and Brazauskas. As it is mentioned in the
explanatory note to the document, the two agreements do not stipulate any
territorial concessions to Lithuania - no territory is going to be handed over
to the republic without an adequate compensation.
The state ground border virtually fixes the line of the previous border that was
registered on the map of the world in 1963. The documents observed the
principle, according to which any correction of the state borderline must be
inconsiderable, as compared to the line of 1963. Furthermore, a correction like
that is supposed to have an adequate compensation.
It is the first time, when Russia and Lithuania have determined the separation
line on the Baltic Sea, though. During negotiations, the Russian side accepted
Lithuania's request to let it have an access to the Swedish fishing area.
Lithuania compensated Russia with a sea part of 4,2 sq. km. The explanatory note
also runs that such a decision guarantees Russia's possession of the D-6 oil
deposit in the Russian economic area. The agreement stipulates that Russia has a
full possibility to develop the deposit.
As a result of the exchange within the scope of the Russian-Lithuanian state
border agreement, the two countries have compensated each other with the total
of 413,8 hectares each. State border agreements between Russia and Lithuania
represent the interconnected solution of a package of issues on the base of
balanced interests of the two countries.
Lietuvos Dujos profit down
Lithuanian gas company Lietuvos Dujos closed the first half of the year with a
pre-tax profit of 51.4m litas, up 24.2% from 67,807m litas compared with the
same period last year, Interfax News Agency reported on August 2nd.
Net profit for the period totalled 43.3m litas. The company did not calculate
net profits for the first half of last year, according to the statement.
Earnings on gas sales dropped 9% year-on-year for the period 228.6m litas down
from 250.9m litas due to a decrease in prices.
Klaipedos Nafta profit down
Lithuanian oil terminal Klaipedos Nafta closed the first half of the year with
pre-tax profit of 22.8m litas, down 4.2% from the same period last year, a
company source said recently, BNS reported.
"There were no particular changes, just this year the company does not have
US$ loans. Moreover, due to the drop in the exchange rate last year the earnings
were on paper," he said. Turnover for the period slipped 0.3% year-on-year
to 61.2m litas. Klaipedos Nafta loaded 3.64m tonnes of fuel oil and light
petroleum products in the first half of the year, up 7.5% from 3.39m tonnes in
the same period last year. It plans to load 7.2m tonnes of petroleum products
this year and end the year with a net profit of 11m litas.
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