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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: 319 - (26/07/07)

There is trouble brewing 
Lithuania is in the eye of the storm between Poland and Russia. Its own security is deeply compromised by the existence of Kaliningrad, where Lithuanian citizens periodically go missing. 

Now in an escalation of the Polish-Russian fall-out, the Russian Deputy Prime Minister, Sergei Ivanov, Putin's best friend and likely successor, has said that Russia would consider placing cruise missiles in Kaliningrad, if Washington goes ahead with missile fence plans for the Czech Republic and Poland.

History weighs down on the Balts - and Lithuania in particular 
It is nothing new for Lithuania to find its fate settled by its larger neighbours. In the Middle Ages for a while it was an enormous entity itself, stretching from the Baltic to the Black Sea no less, entering into a Catholic Commonwealth with Poland in the Union of Lublin in 1569. But the Russians coveted the Polish and Lithuanian lands. The three partitions of Poland of 1772-95, carried out by Russia, Prussia and Austria, saw the lion's share grabbed by Catherine the Great's Russia, notably Lithuania. 

Now Lithuanians suffered the fate that they had always dreaded, Russian subjugation. It was not to end until the conclusion of the First World War, when a valiant defence of Poland from Bolshevik hordes saved the newfound independence of Lithuania too. Also for only a brief while Lithuania was the victim of the Nazi-Soviet Pact that cynically consigned the Baltic states to the USSR, which duly took them over in June 1940, when far greater events taking place elsewhere eclipsed the matter. Churchill and Roosevelt never seriously negotiated over Poland, let alone the Baltic area. Their fate was sealed for half a century.

But Soviet occupation was always an anomaly. How it was heroically brought to an end is known to all, Lithuania playing the leading role. Its independence, declared in March 2,000, was made real the next year in August. An irreversible independence is now the Lithuanians' dearest treasure. Nothing is more valuable than one's very autonomous identity, lost twice, but twice regained. Lithuania will surely be forever free. 

But there is no doubt that the Russian bear is growling again and the Poles seem to enjoy sticking pricks into its hide. The deployment of missile defences in the Czech Republic and Poland at this juncture is hardly wise. The Lithuanians should say as much. But with a president who is an American citizen, due to his exile from his country during the long Cold War, the old anti-Russian reflexes are likely to be paramount, in which the US can scarcely do anything wrong- not when it is goading the Russians at any rate. 

Baltic and Polish firms to negotiate nuclear plant
One way of lessening dependence on Russia is to generate it's own power. That is exactly what the Balts are determined to do. The Baltic States and Poland, nevertheless, failed on July 6th to sign a formal agreement to proceed with a joint US$9 billion nuclear power plant in Lithuania and instead charged their energy companies to negotiate a shareholder deal. 

The plant will replace Lithuania's ageing Ignalina facility, which has to be shut for safety reasons under a deal with the European Union, and is seen as a key instrument in helping the participating countries reduce their reliance on Russian gas. 

A meeting of prime ministers in Vilnius had been expected to rubber stamp a deal, but Poland's Jaroslaw Kaczynski failed to attend. Organisers said this was for domestic political reasons. 

Poland, with Latvia and Estonia, has disagreed with a law passed by Lithuania's parliament, under which Vilnius is to have 34 percent of the project and other partners 22 percent each. "We agreed to start negotiations between our energy companies to prepare a shareholder agreement," Estonian Prime Minister Andrus Ansip told a news conference in Vilnius. 

"Poland confirmed it will take part in the project," his Lithuanian counterpart Gediminas Kirkilas added. The talks will focus on how the plant is run, shareholdings and on the size of the reactor, prime ministers said. AB Lietuvos energija, Latvia's AS Latvenergo, Estonian Eesti Energia and Poland's Polskie Sieci Elektroenergetyczne SA will be the participants in the talks. "We have decided that all the details need to be worked out at the level of the companies," a Lithuanian official said. 

Environmentalists said they were glad a final deal to build a new nuclear plant had not been signed and they criticised the governments for failing to consider renewable energy sources. 

"The new Baltic nuclear power plant has no economic or environmental justification," the Green movements of Poland, Latvia, Lithuania and Estonia said in a joint statement. The new nuclear plant is expected to be built by 2015 and generate around 3,200 megawatts of power, decreasing dependency on power from fossil fuel and on energy from Russia. 

"We prefer European, North American or Japanese, but not a Russian producer to supply the reactors," Estonia's Ansip told Reuters. A decision on the type of reactor to be used will have to be taken by consensus, he added. 

Firms including French state-owned nuclear group Areva and US General Electric have stated their interest in supplying the reactors for the new plant. A Lithuanian government source said the proposed shareholdings in the project could change in the process of negotiations, although the Lithuanian share would not. Ansip and Latvian Prime Minister Aigars Kalvitis said they were now more concerned with how much power they would get from the project than with the shareholdings. 

Contretemps with Latvia
It is not only big neighbours who pose problems. Small ones can too. Relations with Latvia are generally good - far better than with Belarus under dictator Lukashenka. But there is a fly in the ointment just the same - to do {who would be surprised?} with energy. 

The new president of Latvia, Valdis Zatlers came to Lithuania on July 13th to meet with his counterpart there, Valdas Adamkus. "It is important to develop a dynamic policy, and good relations are the basis of such a policy. They have been defined today," Zatlers told journalists after meeting with Adamkus in Vilnius. 

Adamkus voiced confidence that the two presidents had managed to establish close ties. "We had a very warm and pleasant meeting," he said at a news conference, adding that his new Latvian colleague left an impression of being an expert in Latvian affairs. 

However, there was one note of not so minor discord, Zatlers admitted, concerning the issue of a definitive Latvian-Lithuanian marine border treaty. "I believe that the issue is at an impasse. It is a high time to resolve it. It seems a bit archaic that problems remain unsolved for years on end," Zatlers said. 

Adamkus also voiced hope that the issue would "move from deadlock." But "Lithuania, for its part, has done everything it could. I hope we will find a solution," Adamkus speculated, notably giving no ground whatsoever. 

Lithuania ratified the marine border treaty with Latvia that was signed in 1999, but in Latvia it has remained in a state of suspended animation, largely as a result of geological reports suggesting that undiscovered oilfields may lie within the proposed border zone. Latvian fishermen have also voiced concern that they may lose access to their traditional fishing grounds. 

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ENERGY

Baltics need investment to avoid electricity crisis

The Baltic states need to make additional investments to avoid a looming energy crisis. "In 2010, if we don't make additional investments, the Baltic states will become an energy-deficit region," Deutsche-Presse-Agentur (dpa) quoted Anicetas Ignotas, undersecretary of state at Lithuania's economics ministry, as saying. 
The heart of the problem is the Soviet-era nuclear power station at Ignalina in eastern Lithuania. According to official figures, in 2005 the 1500-megawatt plant supplied almost three-quarters of Lithuania's total electricity output, with enough left over to export some to Latvia. 
But under the terms of Lithuania's EU accession treaty, the plant, which was built to the same design as the ill-fated Chernobyl reactor, must be closed down by the end of 2009 - almost a decade ahead of the date which its builders had envisaged. 
In February 2006, the governments of the three Baltic states agreed to jointly construct a new nuclear power plant at Ignalina. 
The decision was one of "huge strategic importance for the whole region," Lithuanian Prime Minister Gediminas Kirkilas said. 
But such a plant is not expected to open before 2015 - leaving the Baltics facing a potentially critical shortfall. "The shutdown will destroy the current balance of energy supply in the Baltic states," admitted Ugis Sarma, head of the energy department at the Latvian economy ministry. 
In the last year, each country separately, and all three together, have sought ways to bridge the energy gap. 
Much of the attention has focused on linking the Baltics' energy grids into European networks. Until recently, the trio formed an energy island within the EU, with no physical links to the West. 
In December 2006, that isolation was broken as a 350-megawatt cable, Estlink, was opened between Finland and Estonia. 
The move proved the value of Baltic cooperation, but it should be followed by a link between Sweden's national grid and either Latvia or Lithuania, dpa quoted Latvian Prime Minister Aigars Kalvitis as saying. 
Also in December, the Polish and Lithuanian governments agreed to construct a bridge between their power grids - paving the way to Polish participation in the new Ignalina project. But cross-border linkages are seen as, at best, a partial solution. All three countries are now planning new conventional power stations in an effort to boost their energy independence. 
Estonia is planning to build two oil-shale power stations, to replace two which will be closed in 2015, while Lithuania plans to increase its capacity for gas-powered heat and power generation. And Latvia is debating the construction of a coal- or gas-fired plant, with coal at present apparently the more likely choice. 
But these plans are still in their infancy. The Polish-Lithuanian energy bridge is not expected before 2011, while the Swedish-Baltic link and the Latvian and Estonian power stations exist only on paper. 
And with Ignalina due to close down in 2009, the Baltics may find it hard to stop their tumble into the energy black hole.

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FOREIGN RELATIONS

Agreement to share assistance with Moldova 

Lithuania would share its assistance obtained from the North European countries with Moldova, Lithuanian Speaker, Viktoras Muntianas, recently said at a plenary meeting of the Moldovan Parliament, Mold press reported. 
A Lithuanian delegation, headed by Lithuanian Speaker, Viktoras Muntianas, paid a June 21st-23rd official visit to Chisinau, which included meetings with Moldovan top officials and the Lithuanian community in Moldova, as well as an excursion to the cultural and historical compound, Orheiul Vechi. 
The visiting Lithuanian official assured the Moldovan Members of Parliament that "Lithuania is Moldova's partner which keeps on reminding the European Union" about Moldova's problems and does it's utmost to settle them. "The key to getting Moldova closer to the EU is in your country. You should do your best for the full implementation of the Moldova-EU Action Plan and for the transparent absorption of the EU's financial support," Muntianas was quoted as saying. 
The speaker of the Lithuanian Seimas stressed that in the near future, "there are to be identified new ways for strengthening Moldova's relations with the EU," after the Partnership and Cooperation Agreement expires in 2008. The Lithuanian official hailed Moldova's achievements in getting the EU autonomous trade preferences, the signing of the agreements on simplifying the EU visa regime and readmission and opening of the Common EU Visa Application Centre in Chisinau. 
Referring to the Transnistrian issue, Viktoras Muntianas was quoted as saying: "Lithuania is sure that Russia should honour its commitments assumed at the Istanbul Summit and withdraw its troops from Moldova's territory." Moldovan Speaker Marian Lupu told journalists that jointly with his Lithuanian counterpart, he considered a wide range of problems, among which the inter-parliamentary dialogue. The speaker stressed that the dialogue improved over the last two years. Lupu underlined that within the Lithuanian speaker's visit, "there will be set a series of goals and priorities for the next years." 

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