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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)

Books on Lithuania

REPUBLICAN REFERENCE

Area (sq.km)
65,200 

Population 
3,607,899 

Principal 
ethnic groups 
Lithuanians 81.3%
Russians 8.4%
Poles 7.0%

Capital
Vilnius 

Currency 
Litas

President
Valdas Adamkus



Update No: 305 - (30/05/06)

Vilnius in the eye of the storm
Not for the first time Lithuania is the venue for massively important events in world politics. It was the first Soviet republic to declare its independence way back in March 1990, triggering off the collapse of the Soviet Union. Now Dick Cheney, Vice-President of the US, has made Vilnius the place to launch another broadside against Moscow.
Speaking to Eastern European leaders in the Lithuanian capital in early May, Cheney made the essential point about Putin's government: that "opponents of reform are seeking to reverse the gains of the last decade." "In many areas of civil society, from religion and the news media to advocacy groups and political parties," Cheney said, "the government has unfairly and improperly restricted the rights of her people." Cheney also accused Russia of using its energy resources to push around its neighbours.
Cheney's comments were a vast improvement on President Bush's claims five years ago of spiritual affinity with a Putin who was already showing his authoritarian streak. "I looked the man in the eye," Bush said in 2001. "I was able to get a sense of his soul, a man deeply committed to his country," the latter part of which few would contest.
Comparing the Bush of 2001 with the Cheney of 2006 calls into question the president's talent for reading souls, and makes you wonder: Who lost Russia? 
Lithuania will not meet the EU's strict convergence criteria for joining the European single currency, the European commission is expected to say.
The Baltic states are always trying to distance themselves from Russia and get closer to the West for obvious reasons. Lithuania, for instance, wants to join the euro in 2007. 
But the commission rejected the bid on the grounds that Vilnius has not done enough to bring down inflation. The commission discussed euro entry bids from Lithuania and Slovenia on May 16 - just two years after they joined the EU. The commission's economics department recommended delaying euro entry until prices are brought under control.
Lithuania's inflation has been well above EU target levels for more than a year, and the commission believes there is little chance of it coming down in the short term. Forecasts for 2006, released by the commission, set Lithuania's inflation at 3.5 per cent, well ahead of the 2.7 per cent target.
Countries wishing to join the single currency need to keep inflation within 1.5 percentage points of the average of the EU's three lowest inflation rates. 
The new member states in central and eastern Europe have some of the most impressive growth rates in the EU, but have struggled to control the price inflation sparked by the economic boom.
But any move by the commission to block euro entry could lead to accusations of double standards, not least because several current members of the eurozone - in particular Greece - have persistently failed to meet the same convergence criteria.
Slovenia's euro entry has succeeded its more likely to succeed - its inflation forecast of 2.4 per cent is well within the 2.7 per cent ceiling - making it the first of the new member states to join the euro club.

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The following is self-explanatory:-

Lithuania's president hits back at Russia's policy on energy
Financial Times interview, Valdas Adamkus, May 4th

President Valdas Adamkus of Lithuania has called for a common European Union front in response to Russia's willingness to use its energy supplies to secure political influence over its neighbours.
Speaking to the Financial Times on the eve of an international pro-democracy conference in Vilnius, Adamkus condemned Germany for backing Russia's controversial planned Baltic Sea gas pipeline, which will circumvent transit countries including the Baltic states, Ukraine and Poland.
He said: "I believe I can understand the Russian position but I can't understand Germany's position. As a member of the EU, they acted without even extending the courtesy of advising the Baltic states (about their plans)."
Adamkus's comments echoed those of Poland's defence minister, Radek Sikorsky, who earlier compared the Baltic pipeline deal with the Molotov-Ribbentrop pact - the secret German-Soviet agreement dividing up eastern Europe signed just before the second world war.
Although the 79-year-old Lithuanian president distanced himself from Sikorski's rhetoric, he left no doubt that Warsaw's concerns are shared by Vilnius, as they are by the EU's other new member states in central Europe. "I don't want to use the word blackmail," said Adamkus in referring to Moscow's efforts to extend its influence through energy policy, but he mad clear he was very concerned about Russia's economic and political pressure.
Adamkus hosted a summit attended by Dick Cheney, the US vice-president, and more than 20 European political leaders, including nine presidents of east European states. The conspicuous absentee was Russia's Putin, who was invited but - to nobody's surprise in Vilnius - declined to accept. His absence gave Russia's critics a chance to voice their complaints unhindered.
Adamkus, a former US government official who returned to his native Lithuania in the 1990s, said the conference highlighted the region's shared democratic values and emphasise the fact that this ideology extended much further than was often supposed - as far as the south Caucasus.
Adamkus said there were differences in interpreting democratic values between Russia and the west but he avoided any direct comment on what is widely seen in the west as Russia's growing authoritarianism.
He urged EU leaders to support Lithuania's bid to join the euro next year, saying the application should not be blocked because the country's inflation rate missed the entry criteria by a "fraction of a percentage point."
Vilnius is lobbying to be admitted alongside Slovenia on January 1st. But the European Commission and the European Central Bank have vowed to interpret the admission rules strictly, including the inflation criteria. Under the latest (March) data, Lithuania's rate stands at 2.7 per cent, just above the required 2.63 per cent.
Adamkus expressed hopes that Vilnius would soon settle the future of the Mazeikiu oil refinery - the largest industrial enterprise in the Baltics - in which Yukos, the stricken Russian oil group, has a 53.7 per cent stake worth an estimated US$1bn (790m Euro, £550m).
Yukos, which runs the refinery in partnership with the Lithuanian government, which owns 41 per cent, has been in talks with Vilnius about selling its stake back to the state. Lithuania would then resell a majority interest to another large oil group, such as Kazakstan's KazMunaiGaz.
However, the Russian authorities, which are pursuing debt claims against Yukos, in April won a US court injunction banning asset sales. Lithuanian officials are concerned that Moscow plans to secure a big stake in Mazeikiu for a Russian state-controlled group such as Rosneft. Adamkus said: "Lithuanians are still sensitive that their economic dependence on Russia should not turn into political dependence."

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ENERGY

Kazakstan, Russia continue talks on oil supplies to MN 


Kazakstan has yet to reach agreement with Russia on deliveries of oil to the Mazeikiu Nafta (MN) oil refinery in Lithuania, Kairat Kaipiev, president of the Kazak Energy Ministry's main dispatcher department of the oil and gas industry, said, Interfax News Agency reported.
"An agreement has yet to be reached. I can say that for sure," he said. KazMunaiGaz nevertheless remains interested in purchasing a stake in MN, he said. Sisengali Utegaliyev, deputy general director of production at KazMunaiGaz Exploration and Production, a subsidiary of KazMunaiGaz, said he was confident that the issue of Kazak oil being delivered to MN through Russia would be resolved. "I think an agreement will be reached in any case," he said. He said the issue of the eventual sale of the stake in MN had not been resolved due to the difficult negotiations between the Lithuanian government and YUKOS.
"Things are being sorted out there internally. For now, they need to decide something amongst themselves," he said. In choosing a potential buyer for the stake in MN, it was important for Lithuania that the company "had the resources and the capability for stable oil supplies," he said. "And we have these resources," he said. It was reported earlier that KazMunaiGaz was considering two possibilities for delivering gas to the company's oil refinery. The first option would be a SWAP-operation with Mazeikiu Nafta, in which the Kazak company would provide oil it produces at the Caspian Sea in return for oil MN produces in the North Sea for its further transit to Lithuania. The second variant envisions the purchase of oil at the Primorsk terminal that has been delivered through the Baltic pipeline system, which could either be Russian or Kazak oil. This oil could then be brought to Lithuania by tankers, he said. The Lithuanian government plans to sell the YUKOS stake in Mazeikiu Nafta along with about 20 per cent of shares in the company, owned by the government. The government hopes to receive about one billion litai for the shares. The 53.7 per cent stake in Mazeikiu Nafta is controlled by the YUKOS subsidiary YUKOS Finance-YUKOS International UK. The Lithuanian government controls 40.66 percent of the shares and the remaining shares are held by minority shareholders. Mazeikiu Nafta includes the Mazeikiai Oil Refinery, the Butinge terminal and Lithuania's oil pipelines.

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Poland's top refiner PKN Orlen bids for Mazeikiu 

Poland's largest oil refiner PKN Orlen has submitted a bid for 40.66 per cent of Lithuania's Mazeikiu Nafta refinery, according to a company statement issued on April 13th. "Moreover, should the GOL (government of Lithuania) purchase the 379,918,411 shares (53.7022 per cent stake) which are currently owned by YUKOS International United Kingdom B.V., PKN Orlen offered to purchase those shares from the GOL for the same price as the price currently offered for the 40.6621-per cent stake," according to the statement, New Europe reported. 
Unconfirmed reports say PKN Orlen has offered some US$1.5 billion for the Mazeikiu refinery. In a bid to assure Lithuanian authorities it could provide the Mazeikiu plant with a steady flow of crude oil, PKN Orlen stressed it had "developed a detailed action plan aimed at ensuring continuous supply of crude to Mazeikiu Nafta." In the offer, PKN Orlen also vowed to invest about US$ one billion in the plant. It also promised to introduce projects related to the production of clean fuels and the improvement of ecological standards, the construction of a pipeline to Lithuania's Baltic port of Klaipeda and the expansion of the refinery's crude processing capacity to 11 million tonnes per year. In a recent article, Lithuania's Lietuvos Rytas daily slammed the Lithuanian government for dragging its heels on the sale of the Mazeikiu plant. Russia's giant YUKOS group owns a majority 53.7 per cent stake in Mazeikiu Nafta, while the remaining 44.66 per cent belongs to the Lithuanian state, which wants to buy up the YUKOS share and sell it off to another investor. Poland's PKN Orlen is the largest fuel refiner and distributor based in Central Europe. The company took over the Czech Republic's Unipetrol Holding fuels company last year and controls some 485 gas stations in neighbouring Germany.

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