Books on Lithuania
Update No: 318 - (27/06/07)
The Balts stick together
Lithuania and Estonia were forcibly incorporated into the Russian-dominated
communist Soviet Union, first as part of a deal with Nazi Germany and then again
at the end of World War II, only regaining independence in 1991. They joined the
European Union and NATO in 2004.
Lithuania firmly sided with Estonia when the Baltic state was plunged into a row
with Russia over the removal at the end of April of a Soviet war memorial from
the centre of the Estonian capital, Tallinn. The Lithuanians are firmly
pro-Estonian, despite great differences of language, religion and culture. They
are after all fellow Lilliputians against a Goliath.
Lithuanian PM questions Russia's G8 membership
Lithuanian Prime Minister Gediminas Kirkilas questioned on June 8th whether
Russia should remain a G8 member, saying it falls short on democracy and human
rights criteria. "Russian leaders must meet the criteria for membership not
only from the economic perspective, but also for democracy and respect for human
rights," said Kirkilas in the Lietuvos Zinios newspaper. "Countries
that belong to certain international forums and organizations should adhere to
the same principles and values," he said.
"Russia was invited to join the G8 with reservations when Boris Yeltsin was
leader and with the hope it would proceed towards a market economy and
democracy. But now we see other signs."
Estonian President Toomas Hendrik Ilves, speaking at an international human
rights conference in Prague on June 5th, also called for Russia's membership in
the G8 to be reconsidered.
Group of Eight leaders, including Russian President Vladimir Putin, were
wrapping up their annual summit in the German Baltic Sea resort of Heiligendamm
on June 8th.
Ignalina nuclear power essential says PM
Poland and Lithuania are being drawn together by common fear of Russia. A good
deal of the antipathy is about energy. Polish Prime Minister Jaroslaw Kaczynski
has said that the construction of a nuclear power plant in the eastern part of
Lithuania will greatly consolidate relations between Poland and Lithuania and
will have a considerable impact on energy security, code words for freedom from
dependence on Russia.
Premier Kaczynski and his Lithuanian counterpart Gediminas Kirkilas, on a visit
to Poland in early June, met with the executive board of Poland's oil giant PKN
Orlen in the central city of Plock earlier today. Orlen has a majority stake in
the Mazeikiai Lithuanian oil refinery.
Jaroslaw Kaczynski said the construction of a new Ignalina power plant, which is
to come on stream by 2015, will change the situation in the region. The plant
will cost 5-6 billion euros. The project will be realized jointly by Poland and
three Baltic States - Lithuania, Latvia and Estonia.
Premier Kirkilas said that the Lithuanian government had approved a bill on the
spelling of names, which enables ethnic Poles who live in Lithuania to write
their names in Polish. "This solution will serve the consolidation of
mutual trust", Kirkilas said. The spelling of Polish names in Lithuania has
been one of the most sensitive problems in bilateral relations.
Poland is prepared for Russian Druzhba oil pipeline shutdown - PM Kaczynski
Poland is prepared in the event that the Russian Druzhba oil pipeline is
shut down, as it can import oil via other routes, Polish Prime Minister Jaroslaw
Kaczynski, together with Lithuanian counterpart Gediminas Kirkilas, told a press
conference, following the visit to top Polish fuel firm PKN
Orlen."Regarding the Druzhba pipeline, there is the possibility that it
will be shut down slowly or less slowly," Kaczynski said. "We are
considering this, and this was the topic of our talks with PKN Orlen's
"Poland has the technical capabilities to import oil through other
routes," he added.
Baltic seabed gas pipeline project: far from a done deal
Leaders of Estonia and Lithuania have publicly joined the growing ranks of
critics and sceptics regarding Nordstream, the Russo-German Baltic seabed
pipeline project for Russian gas. With Nordic countries along the proposed
pipeline route raising environmental and security concerns, its commercial
rationale increasingly questioned, and Russia's capacity to supply the projected
gas volumes doubtful, this pipeline project seems far from a done deal, says
Vladimir Socor. The European Union's initial approval of it looks overtaken by
events as well as hardly making a practical difference.
Opening an international energy forum in Tallinn on May 14, Estonian President
Toomas Ilves cautioned the European Union that over-reliance on Russian gas is
"simply not rational" and that overall dependence on Russia's energy
systems "involves high levels of risk." Estonian Economics Minister
Juhan Parts, in turn, told the forum that the Nordstream consortium's recent
proposal to lay the pipeline through Estonia's maritime economic zone
"arouses serious concern."
On May 21, Lithuanian Prime Minister Gediminas Kirkilas told an international
conference on energy security in London that the Gazprom-led consortium has not
responded to his government's request for an independent environmental
assessment to be undertaken regarding this project. Moreover, he noted, the
project's cost is excessive and likely to outrun the consortium's already high
estimates. Alluding to Germany's apparent assumption that it "would be
stronger by dealing with Russia on a bilateral basis," Kirkilas called for
EU solidarity in negotiating with Gazprom.
The Nordstream consortium estimates this project's cost at $6.6 billion.
According to energy expert Alan Riley of London's City University, speaking at
the same conference, that estimated cost exceeds by a factor of three the cost
of building an overland pipeline of equivalent capacity. Moreover, the project's
actual cost seems likely to escalate beyond that initial estimate (BNS, Reuters,
Thus, the choice of a seabed pipeline over alternative options means high prices
of gas to end consumers in Germany and other European countries. The consortium
would enjoy wide latitude to dictate prices to consumers if Gazprom and its
German partners -- Ruhrgas and Wintershall -- lock in those markets thanks to
the Nordstream pipeline.
Politically, the Nordstream pipeline would "draw a new border across
Europe," according to the Polish Sejm's [parliament] foreign policy
committee chairman Pawel Zalewski. In Warsaw's view, the seabed pipeline would
cut off the EU's new member countries, Poland and the Baltic States, from the
old EU countries, particularly Germany: "The latter would be connected
directly to the Russian valves while the others would be left alone [in a
crisis], hoping for Russia's mercy" (Financial Times Deutschland, May 18).
The Nordstream pipeline was designed to carry 27.5 billion cubic meters of
Russian gas annually starting from 2010 in the first stage and another 27.5
billion starting in 2012 in the second stage, for a total of 55 billion cubic
meters over a 25-year period. Those projections, announced in October 2005 and
not officially revised since then, look unrealistic by now. The time frame is
being stretched out, investment is not lined up, and Russia itself faces a
probable deficit of gas from 2011 onward, relative to its supply commitments
internally and externally. The Yuzhno-Russkoye gas field in western Siberia --
which was touted to the German public in 2005-2006 -- can only supply a part of
those projected volumes in the early years. Recognizing this fact, the Kremlin
then defined the Shtokman field as the main source for Nordstream, but seemed to
reverse itself again by announcing plans to assign Shtokman's early output
primarily to liquefaction. All this is tentative and hypothetical, as Russia's
exclusion of Western stakeholders from Shtokman is delaying by some years the
A series of recent developments have cast heavy doubt on Russia's reliability as
an economic partner generally, not just with respect to gas. Russia is
conducting several politically motivated commercial "wars"
concurrently: agricultural produce and wine embargoes against Moldova and
Georgia, interdiction of meat imports from Poland, cut-off of crude oil supplies
by pipeline to Lithuania, and most recently the cyber-war launched from Russia
against Estonia -- a novel form of economic warfare.
As Kirkilas informed the London conference, Russia's oil pipeline monopoly
Transneft announced the preceding week that supplies to Lithuania are being
suspended indefinitely. According to Transneft, use of the pipeline to Lithuania
is "uneconomical" and consequently there are no plans to repair it.
Transneft stopped deliveries in July 2006, citing a minor leak on that line in
Russian territory, but in fact retaliating against Lithuania for selling the
Mazeikiai refinery to a Polish company, in preference to a Russian one. During
the intervening 10 months, the Russian government has ignored all Lithuanian and
EU requests for information and offers of assistance if necessary to repair that
pipeline. The oil cut-off is now all but official.
Interest in deployment of anti-missile defence system
Lithuanian Defence Minister, Juozas Olekas, recently told a press conference
that his country is interested in the deployment of an anti-missile defence
system on its territory, similar to the US proposals currently being considered
by Poland and the Czech Republic, in order to protect its planned nuclear power
plant, "Our country needs these systems," the minister was quoted as
saying, following a visit to the Moldovan capital, Chisinau. "There is a
threat that in several years rogue countries could find technical capabilities
for an attack. The world must prevent this. One of the solutions is the missile
defence system offered by NATO (North Atlantic Treaty Organisation). This is how
we would like to secure the power station we are planning to build in our
He disagreed with the view that deployment of the US National Missile Defence (NMD)
system in Eastern Europe would target Russia, or be a step towards a new
"Cold War." Olekas also said that "the Moldovan military may join
the NATO peacekeeping mission in Afghanistan, New Europe reported.
"Lithuanian troops in that country are involved in the reconstruction of
the provinces that suffered during hostilities, and other humanitarian
issues," he was quoted by dpa as saying. For his part, Moldovan Defence
Minister, Valery Pleshka, said that his country cooperates with NATO, while
remaining neutral as stipulated in its Constitution. "Currently, our
cooperation proceeds under the NATO-Moldova Individual Partnership Action Plan (IPAP),
one of the main goals of which is to modernise this sector and to enhance the
ability to respond to new risks and threats," Pleshka said.
PKN Orlen hopes Mazeikiu will become profitable
PKN Orlen CEO, Piotr Kownacki, is certain that Lithuania's Mazeikiu Nafta, which
is now controlled by the Polish oil company, will begin turning up a profit by
the end of the year. "I am certain that Mazeikiu Nafta will be profitable
by the end of the year. As yet it is hard to say whether the balance sheet will
be positive. This depends on whether insurers will pay," Lietuvos Rytas
newspaper quoted the CEO in an interview on May 29th, New Europe reported.
A fire occurred at Mazeikiu's refinery last October, reducing the company's
output. This mainly explained why Mazeikiu Nafta ended the first quarter of 2007
with net losses of 135 million litas. It is expected that the second quarter
will end with a loss for the company as well.
Kownacki said that he was optimistic that Mazeikiu Nafta will eventually become
profitable, because a five-year plan envisaging an increase in the value of the
Lithuanian oil company through the attraction of some US$1 billion in investment
had been developed, together with PKN Orlen. An increase in output is expected.
Moreover, measures to increase the quality of products will be taken.
PKN Orlen's CEO said that a pipeline from Mazeikiu Nafta to Klaipedos Nafta will
be built. A working group headed by Lithuanian Economy Minister, Vytas Navickas,
has been created to discuss the issues of selling Klaipedos Nafta to PKN Orlen.
"The issue of laying a pipeline to Klaipeda is linked to the issue of
Klaipedos Nafta's shares. We are rather flexible at talks and we can accept
various proposals; however there is one condition: Mazeikiu Nafta's interests
should be taken into account," Kownacki said.
The CEO made no forecasts regarding oil deliveries from Russia to Lithuania.
"I cannot believe that such an experienced Russian pipeline operator as
Transneft cannot settle these problems on time," Kownacki said, adding that
"there could be political reasons behind this fact." Mazeikiu Nafta
includes the Mazeikiu refinery, the Butinge oil terminal and Lithuanian
pipelines. YUKOS International sold PKN Orlen a 53.7 per cent stake in Mazeikiu
Nafta for US$1.492 billion on December 14th.
FM calls for closer cooperation with Bosnia
Starting an official visit to Bosnia-Herzegovina, Lithuanian Foreign Minister,
Petras Vaitiekunas, said on June 7th in Sarajevo, that the two countries should
further improve their cooperation, Deutsche Presse-Agentur (dpa) reported.
Lithuania, as Vaitiekunas said after meeting with his Bosnian counterpart Sven
Alkalaj, is ready to support Bosnia's progress towards the European Union.
The Baltic region, he said, is willing to help the countries of Southeastern
Europe to join the EU family and therefore Lithuania is to host a summit of
Baltic and Southeastern Europe's countries next year. Bosnia-Herzegovina and
Lithuania, the two ministers said, should also further improve their economic
cooperation. The current trade exchange between the two countries, as minister
Alkalaj said, amounts to some 2.3 million Euro a year and should be
significantly improved in the future. Lithuania, which has already been involved
in Bosnia's business as investor in the Aluminium Factory Birac in the eastern
Bosnian town of Zvornik, according to minister Vaitiekunas, also hopes to score
success in the privatisation of the largest of Bosnia-Herzegovina's aluminium
factories in Mostar, through a Lithuanian-Polish consortium. With Bosnia's
Minister of Foreign Trade Slobodan Puhalac, Vaitiekunas signed an agreement to
improve and protect investments between the two countries, as the first step
towards boosting the economic relationship. While in Sarajevo, Vaitiekunas also
met with the members of Bosnia's tripartite state Presidency and the country's
Premier Nikola Spiric.
Cooperation agreement on classified info with Bulgaria
Bulgarian and Lithuanian governments recently agreed to sign an agreement for
cooperation in protecting of classified information, Bulgarian media reported
citing the country's State Commission on Information Security (SCIS), according
The agreement was to be signed by SCIS chairperson Tsveta Markova for Bulgaria
and the State Secretary of the Lithuanian Ministry of Defence recently.
Retail sales on the rise this year
Preliminary data shows that retail sales in Lithuania and Latvia increased
year-on-year in the January-April period of 2007, with Lithuania's growing by 21
per cent to 9.3 billion litas (2.69 billion Euro), excluding VAT, and Latvia's
growing by 26.9 per cent year-on-year in constant prices, Kamcity reported.
Lithuania's sales of food retailers increased by nine percent, while the revenue
of restaurants, bars and other catering establishments rose by 1.6 per cent. In
Latvia, the central statistics office said that sales in April fell 2.8 per cent
month-on-month, but increased 24 per cent. Sales of catering companies in April
fell 5.5 per cent from March, and increased 8.3 per cent from 2006. In the first
four months of 2007, catering companies saw sales rise by 9.9 per cent