Year 2007 for Lithuania

Year 2007 is drawing to the close.  What did it bring to Lithuania?  I would like to mention few events that were important for Lithuania in 2007.

In the internal politics no major revolutions.  The municipality elections took place, no surprises there.  However, the biggest shock to the Lithuanian political establishment was a fantastic performance by the populist Liberal Democrats in Vilnius.

The Lithuanian Liberal Democrats, who are now, would like to be called ‘Law and Order’ Party are lead by the impeached president Rolandas Paksas.  The party managed to get more than the others and had a chance to collect a coalition, which is still ruling Vilnius.  Snobbish Vilnius dwellers until then maintained that the populists would never succeed in the Capital.  Well, they were wrong.

In the national politics the biggest surprise is that the minority centre – left government is still running and it looks that it will survive until the next general elections in autumn 2008.

The Parliament, on the other hand, remains the weakest spot of the Lithuanian political establishment and by many commentators denominated as the worst Parliament since the restoration of independence. The internal political fighting resulted in dismissal of the head of the VSD (States Security Department, equivalent of the CIA or MI6).  The other head was choisen and appointed however, the situation did not change much.  The VSD is still strongly influenced by the same political group.

Another interesting moment in the Lithuanian politics was resignation of a Minister of the Interior and the Police Commissar.  For once a Minister took responsibility and resigned.  The resignation followed after the tragic traffic incident in Skuodas region, Aleksandrija village, when a drunken policeman’s car mortally wounded three boys walking home from School.  The policeman left the dying children on the road only to give himself up next day.

Even though the policeman was off duty during the incident the Minister and the Commissar found courage to resign.  This incident only strengthens the resolve to fight the so-called ‘war on the roads’.  Lithuanian Parliament passed amendments to the Driving Code and toughened penalties for the offenders.

The private and the public capital will be the main partners in the project of the century in Lithuania.  The Vilniaus Prekyba group and the Lithuanian Government agreed to establish the LEO LT company which will be responsible in representing Lithuania in the Pan Baltic + Poland project of building a new Nuclear plant in Ignalina.  The company will also build the electricity links to Sweden and Poland.  Even though the LEO LT is started on controversial foundations it should keep Lithuania as the Nuclear Country.  The Parliament should amend a law on the LEO LT establishment in January.

The economic growth continued and reached about 10% GDP this year.  Hence, the overheating of the economy is another hot topic in Lithuania.  The first result of it is the biggest inflation since 1997.  This year it reached 7,5%.  The banks, which mostly all are Scandinavian owned, are tightening up the terms for the loans and the economy is expected to slow down.  The property prises might fall down to 15% this year.

The majority of the Lithuanian economists agree that Lithuania will have a ‘soft’ landing, even though some of the foreign experts predict it to be a ‘hard’.  Some speculations on the devaluation of Litas come from the western media.  However, all economists convinced that the devaluation will not happen.  The reason is simple; there is no need for it.

However, Lithuania experiences its first EU disappointment when it missed the EURO adoption criteria.  On the other hand Lithuania has become a member of Schengen. On the International front Lithuania traditionally was active in the Eastern Europe.  Still, President Adamkus was awarded a prestigious ‘European of the Year’ award for mediating between Poland and the EU during the talks for the amended constitution.

The Energy conference organised in Vilnius started a Sarmatia project, even though it was ignored by some of the European leaders.

Lithuanians thoroughly observed the Bronze Solder events in Estonia and supported our Northern cousins full heartedly.  The commentators admirably followed the actions of the Estonians.

The events in the brotherly Latvia were also followed and commented upon.

Since the Lithuania invested a lot of political capital in Ukraine and Georgia it also followed the event there.  Some commentators were disappointed with Saakashvili reaction but the Ministry of the Foreign Affairs constantly maintained that ‘we understand and the we support’.

Over all 2007 was a good year for Lithuania, even though the optimism was lesser than in 2006.  2008 will bring the new parliamentary elections and it looks that the populists are returning to the top positions in the opinion polls.  The inflation will be a problem, hopefully a ‘soft’ landing will materialise.

Hopefully the negotiations with the Balts and the Poles regarding the new Nuclear Plant in Ignalina will be smooth and the electricity grid at least with Sweden will start show the concrete results. Lets hope that all best Lithuanian basketball players will gather to the National team for once, and the Lithuanians will get in Olympic medals again.

Happy New Year to everyone and thank you for reading this blog!                   

A Lithuanian politician’s blog in English

One of the most PR conscious Lithuanian politicians, Ex-Vilnius Mayor Artūras Zuokas just started his blog in English.  It is only a beginning, however, the politician promised to post at least once a week.

I have no affiliations to the Liberal Centrist party which Mr Zuokas is heading. Nevertheless, it is the first Lithuanian politician who is writing his blog in English.  To some extent I admire this self-made person.  Never the less, there are some controversies which are dragging behind Mr Zuokas which turns him into being ‘just another Lithuanian politician’.  Still, if you not convicted, you are not guilty, this is how it is suppose to be in a democratic state, and this is how it is in Lithuania.

However, this is an extraordinary person, hence I recommend to for those who are interested in the Baltic Politics to have a look at the Artūras Zuokas’ blog from time to time.  I would like to believe that more Lithuanian politicians and commentators would follow the trend and will start writing they blogs in English also.  When they will do, I will certainly inform you.  We, Lithuanians, are rather slow to start but once we started then…  

Lithuania is not a monster after all

As the BNS agency informed the two thirds of respondents in the Russian Kaliningrad region hold favourable opinions of Lithuania, while every second have visited Lithuania after the international community recognized the Baltic state’s restored independence in 1991, shows a survey carried out for the Lithuanian Foreign Ministry.

It is a rather surprising result knowing that the Baltic States are constantly portrayed by the Kremlin controlled media as the Russia’s enemy Number one.  It could be noted that Kaliningrad dwellers that are living just next door to ‘the enemy’ and constantly interacting with it, think that Lithuania is not a monster that the Kremlin ideologist portray it to be.

According to the poll performed earlier this month, 65% of those polled think of Lithuania positively and 15% have a negative opinion. Those who have visited Lithuania after 1991 are more favourably disposed towards the country (71% think of it positively).

The name of Lithuania and Lithuanians has dual associations for Kaliningrad residents: every fourth respondent thinks about difficulties they have encountered when entering the country (visas, customs passports, 5-7% think about the poor relations with Russia and Russians or have unpleasant memories. Some 9% of respondents think that Lithuania is a member of the European Union (EU).

Some 70% of those polled think of Lithuania as having a rich culture and a modern state attractive for tourists, while six out of ten believe that Lithuania is a country of nice and friendly people, as well as outstanding athletes.

Five out of ten respondents in Kaliningrad see the neighbouring Lithuania as politically stable, whereas 40% note its rapid economic development.

Respondents in the Kaliningrad region have split opinion about Lithuanian relations with Russia: 31% see the relations as good, 35% disagree and another 34% do not have an opinion on the matter.

Some 55% of those polled believe that the relations between Lithuania and Kaliningrad are medium – the opinion is more common among those who have visited Lithuania, people of senior age and living in rural areas.

Respondents with higher income and residing in the district’s cities hold the best opinion about Lithuanian-Kaliningrad ties.

Asked about what they think when crossing the Kaliningrad-Lithuanian border, 28 % said they thought: “Why can’t we have this?”, 25% – “Just like in our country” and 22% – “It is a modern and European state”. Merely 3% of those polled said their first thought was that Lithuanians could do things better.The best opinion about Lithuania in general is held by people of middle age, with higher income and residing in cities.

Those who have visited Lithuania tend to have a better opinion about the Baltic state, on the other hand, they also remember the difficulties encountered when crossing the border.

In the opinion of respondents, the biggest obstacle hindering closer cooperation between populations of Lithuania and Kaliningrad include border formalities and visas, Lithuanian membership in the EU and NATO and the stance of Lithuanian administration towards Russia.

To ‘Time’ – ‘It is not Putin, it is Oil, you stupid!’

It appears that the Time mag has lost a plot once again.  Stalin was chosen twice.. Hitler was chosen in 1938, a year before that bloodiest war erupted.  I am sure that the magazine had the same line by appointing the despot as appointing Mr Putin: ‘TIME’s Person of the Year is not and never has been an honor. It is not an endorsement. It is not a popularity contest. At its best, it is a clear-eyed recognition of the world as it is and of the most powerful individuals and forces shaping that world—for better or for worse. ’

However, who would disagree that the Time nomination did not add to Hitler’s popularity in media controlled Nazi Germany, and evening the wider world ‘if  the Yankees think that our Leader is great, why should I doubt his greatness?’ probably many Germans thought back in 1938.

I am not comparing Putin to Hitler, but a free world magazine should have more respect for democracy, and should not play a cheep ‘let’s be controversial this year’ game.  The Putin controlled media will take a full advantage of that.  The Time magazine should be clear, they will not mention that the nomination is ‘not a popularity contest’.

Putin has destroyed a democracy and finally buried hope of Russia ever becoming a normal country, when the neighbouring countries sees it not as a threat but as a partner.  He created a system which is much more dangerous to Russia then that of Yeltsin one.  We are all humans, even Mr Putin, hence, what would happen if let’s assume by an incident or accident the leader is gone…  What would happen to Russia then?

It is not Putin who should be nominated to a Person of the year.  He was just a product of the lucky circumstances.  If the Time Magazine run out of options they should not have chosen not a human but a real Tsar of the world – Mr. OIL, as one of the Lithuanian bloggers suggested.  Mr. OIL runs the world at the moment.Have a look what the Time main raival, the Economist thinks about the choise.

Lithuania’s govt wraps up talks with NDX Energija

As the BNS reported more than a fortnight long talks between Lithuania’s government and private equity company NDX Energija have been wrapped up. However, the results are not being announced for the time being.T

he lawyers would review the texts of documents, and the negotiators would hold another meeting on Monday to harmonize those documents officially, Vytas Navickas, economy minister and head of governmental group of negotiators, told the reporters on Sunday night after the completion of the round of talks that lasted for almost 12 hours. On Saturday the groups of negotiators worked about 14 hours. The decision would probably be adopted on Wednesday, Navickas added.

Unofficial BNS sources reported that the governmental task group would put forward two alternatives – either to establish the national investment company on the framework of state-run power utility Lietuvos Energija (Lithuanian Energy), as provided for in the new nuclear power plant legislation, or to set up a new parent company that would require respective amendments to the legislation to be passed.

With the first option chosen, NDX Energija would not participate in the setting up of the national investment company, often dubbed “the three-headed dragon”.In the other case the company would get more than one-third in the new company that would be set up via the merger of Lietuvos Energija, the state-run power grid operator Rytu Skirstomieji Tinklai (RST) and the other power grid operator VST, which is controlled by NDX Energija.“Both parties to negotiations have discussed all issues, no issues for consideration remain – the discussions are closed. We have coordinated the provisions for the functioning of the national investment company, and that company could work successfully on that basis. There will be a common position,” Navickas told the reporters.

“The discussions of all issues have been wrapped up. I think it is important,” Darius Nedzinskas, NDX Energija CEO, said after the talks.He reminded, however, that the talks had not been closed pending the final decision of the government.

The talks between the government and NDX Energija on the setting up of national investment company were launched on Nov. 30 after two delays.

The government first proposed to establish the national investment company based on the model set forth in the nuclear power plant legislation adopted by the parliament, i.e. on the framework of Lietuvos Energija via the raising of its authorized capital with the state-owned shares of RST and the shares of VST controlled by NDX Energija.

Meanwhile, NDX Energija proposed to set up the national investor via the establishment of a new parent company, which would enable the new entity to avoid the effects of contracts concluded by Lietuvos Energija with Russia’s energy giant Inter RAO UES.

Navickas said last week that the government would consider the opinion of NDX Energija, i.e. to establish a parent company, separately should the position of NDX Energija remain unchanged during the weekend.

He admitted then that the option proposed by NDX Energija could be implemented much faster and was better in legal terms since it would offer a chance to avoid potential conflicts with the shareholders and creditors of Lietuvos Energija who might challenge the company’s evaluation and its reorganization.

However, that option would not be advantageous in economic terms as the new company would lose its financial history, which would aggravate its talks with banks, Navickas said.

The representatives of NDX Energija earlier expected their share in the soon-to-be-established national investment company to reach at least 40 percent.According to initial schedules, the talks were supposed to be closed by Nov. 16 and the national investment company was to be established by Jan. 1.

Lithuania needs new nuclear plant, but not at any cost

Lithuania needs a new atomic power station in order to prevent an economic crash in the next decade, as it faces an energy crunch after the planned shutdown of the Ignalina Nuclear Power Plant (INPP) in late 2009, SEB Vilniaus Bankas analysts said.

As the BNS reported speculation about the closure of the second block of the Ignalina plant is still rife, but the chances that the country will continue to generate nuclear power after 2010 are diminishing, the analysts said in their latest Lithuanian Macroeconomic Review report.

“If we were left without nuclear energy, at the start of the next decade the Lithuanian energy system would be in a dramatic situation and would be fully dependent on Russia’s policies and its good will,” said Gitanas Nauseda, advisor to the president of SEB Vilniaus Bankas.

The analyst said that the planned power links with Poland and Sweden would not protect Lithuania from energy shortages.

“Based on realistic estimates, the construction of these energy connections may last until 2015. While demand for electricity worldwide and in neighboring countries is expected to increase, no supply surplus is predicted. Even in Russia, an absolute decrease in installed power plant capacity is anticipated in the coming years. Therefore, import does not seem to be a reliable source of electricity supply,” he said.

Experts point out that a nuclear power station would provide Lithuania with higher energy independence for at least 30 to 40 years.

SEB Vilniaus Bankas’ analysts said in the report that the main drawback of nuclear power plants is that they require huge initial investments.

Lithuanians – Catholics who don’t trust Islam

The opinion poll which was conducted on November 8-17 reveled that majority of the Lithuania’s inhabitants belong to the Catholic Church, only third of them attending Church once a month and are suspicious of the other religions, especially of Islam.

As the BNS reported an opinion poll confirmed that most Lithuanian inhabitants are confessed Catholics and are suspiciously predisposed with regards to movements that are not considered religions of the world.

Results of a poll show that 78.8 percent of the respondents consider themselves faithful to a religion, another 16.4 percent don’t confess to any faith, and 1 percent claim to be atheist.

Among the respondents, 80.2 percent confessed Catholicism, however, only a third – 34 percent – go to church at least once a month.  Catholicism is also the most positively viewed religion, with 75 percent of the respondents valuing it positively, however, with regards to traditional religions, people see Islam in the most negative light, with 34.2 percent of the respondents expressing their views accordingly.  A total of 58.2 percent of the respondents claim that in their opinion, there is a lack of information on religious movements in Lithuania.

The poll shows that Lithuanians are most familiar with the Jehovah Witnesses and Tikejimo Zodis or Word of Faith followers with 52.9 and 51.8 of the polled being familiar with each, accordingly; one in three of the respondents were familiar with Baptists and the Krishna followers’ organizations. 59 % of the respondents said that the activity of religious movements should be strictly observed as it can be detrimental to society – activity of the movements receiving considerable complaints should be put to a halt and only the activities of traditional religious communities should be allowed.

The worst predisposition was expressed with regards to religious movements that are most spread in Lithuania – 37.6 % of the respondents negatively views the Jehovah Witnesses; 32.4 % feel the same way about Tikejimo Zodis religious movement. A tendency became evident, that respondents familiar with these movements tended to be more negatively predisposed to them.

A total of 61.2 % of the respondents said that they have been approached by, offered information, invited to a meeting among other proposals by the Jehovah Witnesses; 21.9 % by Tikejimo Zodis; 16.3 % by the Krishna Conscience Organization. A total of 56.4 % of the polled claimed to not having been in contact with the new religious movements over this time period.Among the respondents, 78 % said that they don’t participate and haven’t participated in any activities of religious movements or groups in the past; 69.6 percent said they wouldn’t consent to their child or grandchild participating in the activities of any religious movement.  Should a family have problems due to a child’s or a grandchild’s participation in activity of religious movements, 15.2 % said they would turn to psychotherapists; 12.6 % would turn to lawyers; 8.2 to the church and 42 % said they wouldn’t know whom to address with this issue.  

Lithuania’s PM sees 2010-2011 euro entry as realistic

As the BNS reported the Prime Minister Gediminas Kirkilas said on Tuesday that 2010-2011 remained a realistic target for euro adoption in Lithuania.

Kirkilas said European Commissioner for Economic and Monetary Affairs Joaquin Almunia had assured him during his recent visit to Brussels that Lithuania still had a chance of joining the euro zone in 2010-2011.

“The European Commission agrees with Lithuania’s projections that inflation will rise to 6.5 percent by the middle of next year and then start to fall. Inflation will be impacted by an increase in prices for energy resources, therefore inflation is controllable,” the premier said in an interview with Lithuanian Radio.

“I think we should not scare ourselves by getting into various, often exaggerated, discussions. Our inflation level is the lowest among the Baltic states,” he said.

Kirkilas noted that Lithuania was meeting all the Maastricht criteria for euro entry, except the inflation criterion. “If we implement our fiscal discipline plan in a consistent manner and keep to the (euro) convergence plan, I believe that Lithuania has chances of joining the eurozone in 2010-2011,” he said.

Al Qaeda may threaten new power plant

As the BNS reported Lithuania should anticipate the possibility that security threats to the planned construction of the power plant can come not only from the East, but also from international terrorist networks, thinks Seimas National Security and Defense Committee Chairman Algimantas Matulevicius.

“Let’s not limit ourselves to talking about the East when considering the threat of terrorism. A power plant is a specific object (…) some person tied with Al Qaeda could by a few shares and, under the current joint-stock company law, would have a full right to find out all security measures utilized in this object, because shareholders have access to almost all of the information, and we can not be playing with this thing”, the MP has said in a press conference.

State of Baltic economies not critical, Credit Suisse vice-president believes

As the BNS reported the economies of the Baltic countries are heating, although the situation is not critical, Darius Daubaras, vice-president of Credit Suisse investment bank, has said in an interview to the Lithuanian business daily Verslo Zinios.

“The inflation level now is truly high, in Latvia the inflation has even reached double-digit levels. It is rather difficult to tame such a devaluation of money since Lithuania has no monetary policy of its own. However, there is no critical overheating although the inflation is a concern,” Daubaras said.

The situation in the Baltic real estate sector was somewhat poorer although it would not affect the overall economy, he added.

“As far as fundamentals are concerned, the economic development continues. So I do not think now that the Baltic countries are heading for the hard landing scenario”, the banker said. However, it was not as yet possible to predict the scale of crisis on the global credit market and its effects on the economies of the region, he added.

In case of soft landing, the slowdown of Baltic economies would last for about a year, Daubaras projected.

In his opinion, foreign investors would now focus on the Baltic retail market, including services, healthcare and retail trade.