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LITHUANIA


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 18,213 13,796 12,000 74
         
GNI per capita
 US $ 4,490 3,660 3,350 74
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 313 - (25/01/07)

Trouble brewing with Russia 
Russia's relations with the Baltic states are taking a marked turn for the worse. Partly this is due to energy problems in mid-winter. But there are other sources of discontent, to do with the past.
In Estonia the Second World War is a live issue, as is the disposal of the graves of Soviet soldiers there, which the radical nationalists in power want to see happen, as well as the removal of war memorials. The Estonians regard the whole Soviet period as an occupation, not a liberation.
So of course do the Lithuanians, who also have taken a nationalist turn right now after the retirement of Premier Algirdas Brazuaskas last year. Brazauskas, as the former communist president of the country, knew how to mollify Moscow.

Conservatives ask Russia to compensate for Jan. 13th victims
Lithuanian relations with Russia could freeze over again if Parliament supports a resolution prepared by the opposition Conservative party that will ask Russia to compensate those killed and wounded in the events of Jan. 13th, 1991. Lithuania had declared independence in March, 1990 and demonstrations in favour of it were mounting in Vilnius. Soviet troops opened fire, killing 14 and wounding many more in the capital - before Gorbachev was able to have them pulled out.
The draft resolution, registered in the legislature in mid-January, states that the Soviet army's attack in Vilnius on Jan. 13th, 1991 - currently known as Freedom Defenders' Day - was an "act of aggression against independent Lithuania and its people" and that many unarmed people were killed and seriously injured. The document also notes that, taking into account that Russia is considered to be the successor state of the Soviet Union, the Lithuanian government should require Russia to pay compensation for those killed and injured during the events, as well as their families.
The draft resolution also calls upon the government to initiate the negotiations with Russia on this issue.
Fourteen people were killed and hundreds wounded during the Jan. 13 attack, when the Soviet army took over the TV tower and radio and television building. Tens of thousands of people surrounded Parliament, effectively preventing the Soviets from attacking the government building.
The resolution, prepared by Conservative (Homeland Union) Audronis Azubalis was welcomed and supported by Vytautas Landsbergis, member of the European Parliament and Lithuania's first head-of-state after regaining independence in 1991. "Jan. 13th was an aggression against the restored state of Lithuania, not another act of violence in an occupied land," Landsbergis, who was president during the events, said in a statement. "The most important thing is to realize the state's duty and responsibility, and to let the people's representatives speak their opinion," he added.

But there are dissenters
The initiative was heavily criticized by Raimundas Lopata, director of the Vilnius Institute of International Relations and Political Science, who called the move "masochism."
"Nobody should play games using such a sensitive issue," Lopata said in an interview with the Baltic News Service. 
He also called for taking into account the international situation and the prognosis that relations between the East and West will be strained approaching 2008.
"The demand to compensate for the victims of Jan. 13th would add tension to Lithuanian-Russian relations. We should consider whether Lithuania will be able to resist this tension," Lopata said.
Lopata also reminded Lithuania that the elections to Russia's Duma, or lower house of Parliament, and the presidential elections will be held soon. "Is it worth handing Russian politicians the Lithuanian card for manipulation?" he asked rhetorically.
Prime Minister Gediminas Kirkilas was also sceptical about the Conservatives' initiative. "Lithuania has addressed Russia with the compensation issue more than once, but all these appeals have had no effect. If we forward new demands, should we expect a reaction?" Kirkilas asked.
He doubtless had in mind that in June 2000, Parliament adopted a law obliging the government to start negotiations with Russia on compensation for the 50-year long Soviet occupation. The damage caused to Lithuania was estimated at $20 billion by a special government commission. Russia refused to acknowledge Lithuania's demand for compensation. Indeed it is never likely to do so.
The Conservatives are playing politics, but this could lead to a serious deterioration of relations or all that, as Kirkilas and Lopata clearly fear.

Lithuania predicts change in Belarus' economy, policies
The views of the Lithuanians on the energy dissension between Moscow and Minsk are worth hearing. The outcome of the Russian-Belarussian talks on the price for natural gas shipments will have a strong impact on Belarus' policies, said Prime Minister Kirkilas. 
"Belarus will inevitably start changing and its economy will have to get adjusted to a new environment. Energy and economic challenges normally affect politics, so change is imminent in Belarus in my opinion," Kirkilas said on national radio on January 14th. 
Belarus' economy up until now has relied on low prices for the energy provided by Russia, Kirkilas said, adding that a nearly 100% rise in the price for gas "may cause tensions in Russian-Belarussian relations to increase." 
"It will be a serious challenge for the Belarussian economy," he said. Vilnius was deeply relieved to learn that Russia and Belarus had signed a gas deal, said Kirkilas. 

Lithuanian president in Warsaw
The Lithuanians are looking westwards these days, now that they are inside the EU and NATO.
President Valdas Adamkus met with his Polish opposite number Lech Kaczynski in mid-January. The Lithuanian president came to Warsaw on a brief visit, which had been re-scheduled. The two politicians tackled bilateral cooperation within the EU as well as energy policy issues. 
Still in December, the Lithuanian and Polish Prime Ministers, Gedyminas Kirkilas and Jaroslaw Kaczynski respectively, had signed an agreement on bridging the two countries power grids, strengthening the region's energy security system. The total cost of the undertaking is to reach 290 million euros. It is expected the project will receive EU financial assistance.

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AVIATION

Aer Lingus announces new route to Vilnius 

Aer Lingus has announced it would commence direct scheduled flights to Lithuania for the first time with three flights a week from Dublin to Vilnius, with service commencing in May 2007, New Europe reported.
Aer Lingus commercial director, Enda Corneille, said: "The introduction of these new routes reaffirms Aer Lingus' commitment to providing direct, low fares access for Irish customers to new destinations as well as providing real growth opportunities in inbound tourism from emerging markets." Special introductory one-way fares excluding taxes and charges from Dublin to Vilnius would be 29 Euro, according to an Aer Lingus statement.
There was no indication how many customers would be served by the new link, either from the Irish or Lithuanian side, or projections on how many might take advantage of the low-cost flight. Low-cost airlines in the European Union have been looking to expand markets to emerging countries. 

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BILATERAL AGREEMENT

Bulgaria agreement with Lithuania to avoid double taxation 

According to a bilateral agreement ratified by the parliament, Bulgaria and Lithuania will avoid double taxation, Sofia news agency reported. 
Bulgaria's parliament passed at first and second reading the government's proposal to ratify the bilateral tax treaty for avoiding double taxation and preventing tax evasion signed between Bulgaria and Lithuania. The taxation treaty was signed on May 9th 2006 in Vilnius. The government of Bulgaria now deems it necessary for the economic cooperation to expand between the two countries.

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ENERGY

PKN Orlen gets status of exclusive supplier of MN

The heads of Poland's PKN Orlen and Lithuania's Mazeikiu Nafta (MN) on January 5th signed an agreement giving Orlen exclusive rights to supply MN with crude oil. "Under the agreement signed for an unlimited time and effective as of the date of signing crude oil will be delivered along the Druzhba pipeline and through the marine terminal in Butinge," the MN press service said on January 8th, Interfax News Agency reported.
The price of oil deliveries in the first five years is estimated at US$19 billion.
Following a trade deal in mid-December 2006 PKN Orlen owns over 84 per cent of the Lithuanian oil company. At the end of July 2006 Russia suspended oil deliveries to Lithuania along pipelines on account of a breakdown and the need for repair. Hence Mazeikiu refinery has been operating at approximately half of its capacity and using crude delivered by tankers to Butinge and pumped from there along a pipeline.

Lietuvos Dujos net profit to remain unchanged in 2006

Lithuania's largest gas importer and transporter, Lietuvos Dujos, which is controlled by Russia's Gazprom and Germany's E.ON Ruhrgas, expects to receive about 50 million litas in net profit in 2006, or roughly the same amount it had in 2005, Lietuvos Dujos director general, Viktoras Valentukevicius, said at a press conference recently, New Europe reported.
Sales are expected to total 800 million litas in 2006 and one billion litas in 2007. Lietuvos Dujos had net profit of 39.2 million litas in January-September 2006, up 21.7 per cent year-on-year. E.ON Ruhrgas International owns a 38.9 per cent stake in Lietuvos Dujos, Gazprom - 37.1 per cent, the Lithuanian government - 17.7 per cent and minority shareholders - 6.3 per cent.

Poland to help build nuclear power plant in Lithuania

Poland will join an international project to build a nuclear power plant in Lithuania. Agreement to build this facility, which will replace the ageing Ignalina power plant in eastern Lithuania, will be signed this year - President of the PSE Polish energy company, Jacek Socha, said in a radio interview recently. 
This is a signal to Russia and Europe, experts say. Representatives of the electricity companies of Lithuania, Latvia, Estonia and Poland met in Warsaw to discuss the project right at a time when Russia cut off the flow of oil to the EU over a transit fee dispute with Belarus. Lithuanian radio journalist, Audrius Braukyla, says the nuclear power plant project is a response to energy blackmail by Moscow. 
'It's the beginning of a new era in the energy field in this part of the world. It is not only about energy but it's also about policy, especially now that the Polish oil company, Orlen, has bought Lithuania's biggest oil refinery, Mazieikiu. Poland is now the biggest foreign investor in Lithuania. This is all a good sign of cooperation towards acquiring independent energy sources.' 
Tomasz Chmal, an analyst at the Warsaw-based Sobieski Institute think tank, says the power plant project shows that the countries of this region are intent on pursuing a new policy that would guarantee security to them. 
'We have to distinguish between different issues - one is electricity in which Poland is independent thanks to its coal resources. Cooperation in electric energy is mainly for the benefit of Lithuania, helping it to diversify supplies. But in the area of natural gas and oil. Poland is highly dependent on Russian oil, which supplies over 95 per cent of its needs.' 
And if only for this reason Poland will not become independent of Russian oil and natural gas supplies in the foreseeable future. The recent cut of oil supplies over a dispute with Belarus, and when Russia closed the tap on its gas supplies through Ukraine to Europe, alarmed the European energy markets and made them question the reliability of Russia as a supplier. 
Ferran Tarradellas, a spokesman for the European Commission, said, 'The EC has underlined that it is unacceptable that energy suppliers or transit countries do not inform their counterparts of any decisions that may affect the supplies.' 
Tomasz Chmal stresses the need for EU solidarity in the energy security field. 'I hope that Poland and the EU will find a common approach toward Russia. It is crucial to find common ground for discussion and try to win individual interests, with one country playing against the other. There is a huge need for solidarity.' 
The nuclear power plant to be built in Lithuania, with the participation of Poland, Latvia and Estonia, is expected to become operational by 2015. According to recent surveys some 60 per cent of Poles are in favour of using nuclear energy for peaceful purposes.

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