Posts filed under ‘Baltic States’

Will Grybauskaite go to Moscow on 9 May? Depends on Medvedev

Lithuania’s President Dalia Grybauskaite has found a perfect excuse to avoid travelling to Moscow on 9 May, when the Russians will celebrate 65 anniversary of the end of the World War Two. She will invite the Russia’s President Medvedev to celebrate 20 th anniversary of Lithuania’s Independence on 11 March instead. It is very likely that the Russian President will decline this invitation.

Since Christmas the Lithuanian media is speculating if Grybauskaite would have gone to the 9 May celebrations in Moscow if she had received an invitation from the Russia’s President Medvedev. The Russian agency Regnum yesterday informed that the Russian President Medvedev will not send any invitations and is expecting the high guests to attend the celebrations on their own accord. However, when yesterday Grybauskaite was asked about her intentions on 9 May she switched to an idea of inviting the Presidents of all surrounding countries to celebrate Lithuania’s Independence 20 anniversary on March 11. That is including the President Medvedev.

Read all article on the Lithuania Tribune

January 14, 2010 at 4:14 pm Leave a comment

Prime Minister Kubilius asks people to be understanding – interview

On 31 December the Vilniaus diena paper published an interview with the Prime Minister Adnrius Kubilius. Even thought the 2009 was a very challenging year the PM hopes that 2010 will be a less difficult year. See the interview

Vilniaus diena – Was 2009 a difficult year for you personally?
Kubilius - This was an interesting year. All these challenges we had to face were sometimes extraordinary, therefore interesting.

Of course, we had to make some difficult decisions. However, I would like to thank the people that they have endured the effects of these decisions.

Vilniaus diena – They have endured them with much difficulty, but have they understood them?
Kubilius - It seems to me that the majority of them have understood the necessity of these decisions. They have understood just as we, the government, have understood that, unfortunately, we cannot avoid making difficult decisions. We had a very clear understanding that there was no other alternative.

The example of our neighbours shows that there is no other alternative. If we do not believe in ourselves, we can compare our situation with the situation in Latvia or Estonia, which have chosen the same way and have implemented similar decisions. They have cut their spending and are planning to cut spending even further; they have increased their taxes as well.

Vilniaus diena – But the Latvian Constitutional Court has ruled against pension cuts. We may have a similar ruling in Lithuania. Will you assume the responsibility if your proposals are assessed as legally invalid?
Kubilius - I would not rush to forecast that Latvia’s decision will be automatically approved in Lithuania. First of all, Latvia has a different system of pension benefits. Moreover, it has different procedures for reducing pensions and other social benefits than in Lithuania. I think that our procedures are more appropriate.

However, I would like to underscore that we will soon discuss the reform of the entire system of social benefits. One of the issues we will discuss is how to compensate for the reduced pensions. This is why I doubt we should be so apocalyptic about the legally invalid decisions.

Vilniaus diena – Many people see 2009 as the year of riots, worries about the future, growing unemployment, decreasing salaries and social benefits, and other disasters. What is your opinion?
Kubilius – This has been the year of energetic activities. I think we have made quite effective decisions that allowed us to stabilize the financial system. Moreover, we have reorganized things in many areas. I would like to mention here the energy sector. I think that comparing the situation with the one we had at the end of 2008, the future looks much better and we have made a huge leap forward.

Just the fact that we have decided to disband LEO LT is very significant. This was not a painful disbandment. We have clearly moved forward with the energy projects, such as the electricity bridge to Sweden, market liberalization, and the construction of a new nuclear power plant…

Vilniaus diena – It looks like we will have to face even more challenges in 2010. Some foreign analytics forecast that we will have one of the worst economy falls, unemployment will reach 20 per cent, salaries will be cut, prices of electricity and other prices will grow. Is it possible to be optimistic?
Kubilius - Of course, there will be challenges. But we should see the positive side. There are some positive signs. I am doing my best to encourage the people to see the good signs. For example, SEB Bank has announced a new forecast, according to which the economy could grow by 1 per cent or so in 2010. Earlier, the forecast was that it would fall by some 3-4 per cent.

On the other hand, the forecasts change every day. When there is an economic crisis, nobody is able to forecast the future correctly.

Vilniaus diena - Which means that the SEB forecast may prove to be incorrect?
Kubilius – Well, at least it is optimistic. This is also very important (smiling).

Vilniaus diena – Does this mean that you are optimistic about 2010?
Kubilius – I think that as far as economic forecasts are concerned, there is a certain rule: It is difficult to predict what is going to happen because of the turning points, this is why when the indicators are falling, they often fall lower than expected; and when they are growing, they grow higher then predicted.

Vilniaus diena - But your optimistic statements will not comfort every fifth Lithuanian who is in danger of being unemployed next year.
Kubilius - Without a doubt, the economy will continue falling for some time. However, the countries to which we export have started to recover from the crisis. This allows us to be more optimistic about 2010 than we were in mid-2009.

We have corrected the forecasts. The Finance Ministry has announced that the economy this year will fall not by 18 per cent, but by 15 per cent. This is an improvement. We can expect much better results next year.

Of course, we will still have serious problems with the budget next year, the debt will grow and the administration expenses will also grow.

Another headache is unemployment. We will seek to find solutions to this problem. This could be done through economic stimulus programmes.

Vilniaus diena – Do you think that unemployment will not reach 15-20 per cent?
Kubilius - The data for the last quarter of 2009 shows that unemployment was stabilized at the level of 11-12 per cent. It is difficult to predict whether this tendency changes or not. However, even in this area there are some signs of optimism.

Vilniaus diena – In your opinion, have we reached the bottom?
Kubilius - We certainly have reached the bottom, and have started slowly moving upward. Of course, we will be in a difficult situation for some time, but we can be more optimistic now because we see the light at the end of the tunnel. This means that we can continue our work to improve our economy and wellbeing.

Vilniaus diena – This economic growth could bring about political instability. Are you confident you will remain the prime minister?
Kubilius - I would like to underscore that the economic growth in the second half of 2010 could improve public mood. I would like to thank the people for this year, despite the several aggressive riots and the broken windows in the Seimas [parliament], the people did not continue [their violence]. This means that society understands that violence will not help us overcome the economic crisis.

There is more optimism in society. This means that political destabilization will be less possible. Because of that the political situation will be more stable and peaceful. I believe that the ruling coalition will be effective and consistent in its work.

Vilniaus diena – Because of the crisis, you have to dedicate more attention to politics and your work in the government. Is your wife not jealous of the time you spend at work? Perhaps she reproaches you for spending most of your time at work and earning less than before?
Kubilius - No. I think I and Rasa [Kubilius's wife] have got accustomed to this way of living. The peaceful atmosphere at home is very important; it helps me to deal with all these challenges in the Seimas and the government. The atmosphere in our home is certainly peaceful (smiling).

Translated by the BBC Monitoring

January 5, 2010 at 12:27 pm Leave a comment

Lietuvos zinios paper views security chiefs’ role in alleged CIA prison affair

See an article from Lithuanian daily Lietuvos zinios about possible links between investigation into death of the Lithuanian State Security Colonel Vytautas Pociunas and the current investigations of alleged secret CIA prisons in Lithuania.

Article by Jurga Tvaskiene: “State in Swamp of Double Lies”, November 26
The habit to lie to the Seimas’ ad hoc commissions, which was introduced by senior state officials, has become a norm. MPs try to fight against this with proposals to introduce prison sentences for those who give false testimonies. If such measures were applied earlier, perhaps now we would know whose interests killed Colonel Vytautas Pociunas and how those who obstructed the investigation into his death are tied to the new scandal related to CIA prisons in Lithuania.

Politicians do not lie – they just do not tell the whole truth. Such a joke can be found on Lithuanian Internet portals. Yet, MPs, who form ad hoc probe commissions in the Seimas in order to find answers to questions that often are unsolvable even to law enforcement officers, are not laughing. Especially, when after testifying before the Seimas’ investigators senior officials admit they have been talking gibberish. And do not get punished.

The increasingly deeper swamp of lies is especially worrisome now, when the Seimas is conducting a probe into the possible existence of a CIA prison in Lithuania. People, who three years ago lied and practically destroyed the probe into the death of Pociunas, a colonel of the State Security Department (VSD), and into the real motives of the VSD activities, will probably be invited to testify in this probe. [passage omitted on the fact that former senior officials of Lithuania denied having any knowledge about the alleged CIA prison].

In April 2004, Rolandas Paksas, who had been president for a mere year and a half, was impeached from his post. Soon after that, Valdas Adamkus returned to this post and transferred actual control of the country to other persons. Including VSD leaders, who during Paksas’ impeachment process, together with other persons desiring influence, got used to doing whatever they liked in Lithuania.

Assistance to Russian special services representatives in developing their businesses in Lithuania, manipulations with classified reports, pandering to the interests of a small group of people, and, on the other hand, attempts to cover their moves with Western partners’ demands. These were daily activities of the VSD leadership.

In addition, one should not forget that the CIA, which after the events of 11 September 2001 declared a war on international terrorism, was spending huge amounts of money on this. Only now in the US scandals are starting that money allocated for antiterrorism activities were spend on unclear things, but the declared goal has not been achieved.

Profitable Service
In the spring of 2004, a group of persons who understand each other very well assembled at the VSD. Thanks to lies, Gintaras Bagdonas was not allowed to become VSD director (Bagdonas, who had been proposed to this post by Paksas, was not suitable for Lithuania, but was greatly evaluated by NATO leadership). After that, KGB reserve officer Arvydas Pocius became VSD director. He was met by Dainius Dabasinskas, who had been a VSD deputy director since 2001 and who had been sent there by the Foreign Ministry. Soon after, Darius Jurgelevicius was also appointed [a VSD deputy director] with the same type recommendations.

By the way, the year 2005 became the year of financial prosperity for these men. The representatives of Lithuania’s poor law enforcement sector started driving luxury cars. For example, Dabasinskas started driving a brand new US-made Chrysler. Was it a gift from CIA colleagues? That same year Dabasinskas, who until then had been renting an apartment in Turniskes, purchased it for more than a half a million litas. This information surfaced only a few years later, when it turned out the apartment had cost less than the market price at the time, and the circumstances of the sale resembled a bribe.

Dabasinskas, just as the other fate brothers, was merely reprimanded, but retained his post. [passage omitted on an overview of the parliamentary probe into the death of VSD officer Pociunas].

On 8 August, Jurgelevicius requested to be discharged from his service at the VSD due to “personal reasons,” without even waiting until VSD Director Povilas Malakauskas returned to work from his unexpected sick leave. Until that moment MPs, who conducted a probe, and civic groups, who were demanding adherence to the principles of justice in Lithuania, were unable to oust Jurgelevicius from his post. After President Dalia Grybauskaite granted his request, the official immediately went as far from Lithuania as possible – it was said he became the Georgian interior minister’s adviser. Considering the fact that Georgia is actively trying to gain greater patronage from the US and therefore may be ready to make various concessions, Jurgelevicius’ desire to work in the institution, which oversees law enforcement and security structures of that country, in the current context may raise various thoughts.

A week after Jurgelevicius’ resignation there was the second news – without commenting on the reasons for his decision, Dabasinskas, Jurgelevicius’ colleague, left his post, too. After receiving a recommendation from the VSD in a record time, he was sent by the Foreign Ministry to work at the embassy in Ukraine.

Exactly two weeks later, American TV station ABC News announced the first information about the CIA prison in Lithuania. One can have various assessments of the Lithuanian VSD inside the country, but it would hard to reject the well-developed ties with foreign partners (especially with the US partners). Thus, it is possible that Jurgelevicius and Dabasinskas, who held high posts inside the VSD, much earlier that the public received information that US media started digging and would soon reveal the information, which had been kept secret for a few years.

It was also only a matter of time before similar news from this or that VSD officer tied to the CIA activities in our country was going reach the public in Lithuania. It was said that even VSD leaders once in a while among themselves were wondering about their subordinates’ silence, which they could not understand.

One can think that VSD heads, who had gained the backing of previous Lithuanian leadership one way or another, realized that to get away this time would not be as easy as during the probe into the death of Pociunas and into the VSD activities related to his death. The countries, which are seen as Lithuania’s friends and which do not belong to the EU (with all of its strict rules), are an excellent shelter in the increasingly difficult situation.

Moreover, if Lithuania this time decides to defend the truth and law, the characters who damaged the country’s reputation probably will not avoid responsibility. [passage omitted on international law Professor Dainius Zalimas's opinion that the state and its officials would be responsible for alleged human rights violations at the CIA prison and on proposals to introduce accountability for false testimony before parliamentary committees].

Translated by the BBC Monitoring

December 1, 2009 at 5:02 pm Leave a comment

CIA prisons in Lithuania as plausible as the adventures of James Bond

The TV station Russia Today reported on the alleged location of a CIA prison on a former Soviet military base in Rudninkai, 40 kilometres from Vilnius.  Lithuanian daily Vilniaus Diena in its editorial on 27 August voiced its suspicions regarding the report.

The news about the exceptional attention paid to the godforsaken Rudninkai by the most powerful spy agency of the most powerful country on the planet, just as the hypothesis about the CIA prison in Lithuania, surprised our country’s leaders, who may have ruled the country without even knowing what was happening here.

The surprise that was showed by the then Prime Minister Algirdas Brazauskas and the then President Valdas Adamkus might seem somewhat fake – theoretically at least one of them (most likely the latter) must have known about the existence of such a secret site.

On the other hand, considering the trust among NATO allies, one cannot rule out the possibility that the prison was simply marked as secret object XY, and the president did not even need to know what was behind those letters. It is even more likely that the very secret information about this very secret object did not go beyond the walls of Lithuania’s special services and was available only to the persons of those services who belong to the so called statesmen clan.

However, in the race who will be the first to find the site of the CIA prison in Lithuania, another question (which has become secondary) is important: Why was this information disclosed only now?

If it is true that the CIA prison was established in our country and if it is true that it happened back in 2001, then this reveals exceptional trust in Lithuania. Since then, the situation has changed a little bit over the years. Lithuania’s relations with the US have not become warmer; there have been essential changes in Washington and Vilnius, however.

In the US, the Guantanamo prison’s political status changed. In Lithuania, Dalia Grybauskaite, who for now demonstrates exceptional attention to Lithuania’s partners on the old continent and clearly wants to boost the front of our country’s allies inside the EU, replaced pro-American President Adamkus.

Both circumstances create quiet favourable conditions for weakening Lithuania’s pro-American positions. Who benefits from increased anti-American moods in Lithuania? This question should be addressed to those who claimed they were the first to “discover” the CIA prison branch in Vilnius region but failed to provide witnesses or strips of prison clothes that would support this version. Without evidence, the appearance of Rudninkai on the map of the world’s most important intelligence agencies seems as plausible as the adventures of the famous 007 agent – James Bond

September 10, 2009 at 9:12 pm Leave a comment

Lithuania’s President; ‘NATO doesn’t have a defence plan for this (Baltic States) region’

As the Lithuanian President Grybauskaite admitted the NATO has no plan a defence plan for the Baltic States.  A custom NATO defence plan for the Baltic States could be expected no earlier than in two years time.

As the BNS writes, a small state has to consider a mixed model for its armed forces, not excluding a certain extent of conscription, Grybauskaite on 28 July told the press after receiving the oath of office of Lithuania’s new Army Chief Major General Arvydas Pocius.

“A little country can think and consider mixed options. Especially as NATO, as you are aware, doesn’t have a defence plan for this region, and won’t have one for another two years at the least,” Grybauskaite said.

The shape Lithuania’s army reserve could take on, i.e. whether this would require reinstating mandatory military training for Lithuania’s youth, is still the object of discussions, Grybauskaite said.

“I haven’t heard any specific proposals, meaning at this time I have nothing to discuss in this respect,” the president spoke.

The North Atlantic Alliance’s developments on a specific defence plan for the Baltic State are yet to be clearly formulated and communicated.

Source BNS

July 28, 2009 at 2:48 pm Leave a comment

Defendant in Medininkai massacre case to be kept in custody in Lithuania till end of October

As the BNS informes the former militiaman of Riga’s Special Purpose Police Squad (OMON) under the Soviet Union’s Interior Ministry will remain in custody in Lithuania until the end of October on suspicions of playing a part in the Medininkai checkpoint massacre.

Sigita Vainauskaite, a Vilnius Regional Court judge, made this ruling on July 27.

This ruling can be appealed to Lithuania’s Court of Appeals.

The decision to extend by three months Mikhailov’s custody term was requested by prosecutor Rolandas Stankevicius, who argued that the accused, who may have committed a felony, is well connected abroad, especially in Russia, and can be expected to try escaping justice.

The judge in Monday’s session also dismissed the former OMON hitman’s request that she resigns from the case over claims of her illegitimate actions.

Vainauskiene ruled that Mikhailov’s accusations have already been covered and answered in previous court hearings.

The defendant felt Vainauskiene shouldn’t be on the panel of judges hearing his case, because of her repeated rulings against his release regardless of protracted court proceedings, which Mikhailov’s defence argues as being overdue. He moreover argued that the judge gave an interview to a journalist working for an Internet news portal before making her ruling and thus violating rules of confidentiality.

Vainauskiene earlier ruled on April 28 to extend Mikhailov’s term of custody for three months. The court then also refused to dismiss the case on the grounds of prescription and release Mikhailov, a decision that was appealed, but also dismissed by the Court of Appeals.

This hasn’t been the first attempt to remove this judge from hearing the Medininkai case. Mikahilov in the end of June tried and failed to get Vainauskiene and Viktoras Dovidaitis removed from the panel of judges.

Charges have been brought against Mikhailov for partaking on July 31 of 1991 in the killing of Lithuanian officers on duty in the Medininkai border control post.

Mikhailov, 40-year-old citizen of Latvia, has for a long time been the only suspect in the said case to be officially charged with suspicion of having partaken in the murder of seven Lithuanian officers. Lithuanian prosecutors in early April also confirmed that official charges have been brought against Alexander Ryzhov who had been in custody in Russia.

Prosecutors say that an investigation with regard to other suspects, also former OMON members – unit chief Cheslav Mlynik and militiamen Andrey Laktyonov and Ryzhov – have been separated and are in process.

On the morning of July 31 1991, Soviet militiamen murdered border guards Antanas Musteikis, Stanislovas Orlavicius, Aras SWAT unit officers Algimantas Juozakas and Mindaugas Balavakas, road police employees Juozas Janonis and Algirdas Kazlauskas with shots to the head.

Police officer Ricardas Rabavicius, who experienced heavy injuries during the attack, died in the hospital Aug. 2. The sole officer who survived the attack was Tomas Sernas, who also experienced heavy injuries at the time of the attack.

Evidence accumulated during the pre-trial investigation leads prosecution to suspect Soviet Union OMON hitmen as being responsible for the crime.

Source BNS

July 27, 2009 at 9:35 pm 2 comments

Lithuanian Foreign Minister heads off to Iceland to discuss its EU bid

As the BNS informed Lithuanian Foreign Minister Vygaudas Usackas on 23 July will depart for Iceland, where he will voice Lithuania’s firm support to the country’s bid for EU accession and offer political and technical help for the impending preparations for joining the 27-strong bloc.

Foreign Ministry spokesman Rolandas Kacinskas said the minister will personally deliver a Seimas’ resolution, which was passed to express support to Iceland’s bid, and discuss how Lithuania can help Iceland amid its preparations.

“The meetings will focus on Iceland’s EU prospect amid the upcoming meeting of EU foreign ministers; Iceland’s application for EU membership will also be addressed. Lithuania is ready to provide political and technical support to Iceland,” Kacinskas on 23 July told BNS.

Usackas will depart for Reykjavik on 23 July evening, with core meetings scheduled on 24 July, including those with the Icelandic foreign minister and influential Members of Parliament.

The Seimas on Thursday adopted a resolution calling on parliaments and governments of EU member states to back Iceland’s EU bid by requesting that the European Commission (EC) by the end of 2009 offers its opinion on Iceland’s readiness for accession talks.

Usackas had earlier said that Lithuania will offer unconditional support to Iceland’s quest.

Political analysts say Iceland could join the bloc in three-four years time. The Nordic country’s EU prospects will be discussed early next week in the General Affairs and External Relations Council (GAERC) session.

Source BNS

July 24, 2009 at 12:11 pm 3 comments

Lithuanian Parliament urges EU nations to support Iceland’s membership bid

As the BNS informed the Lithuanian parliament has urged European Union nations to support Iceland’s aspiration of joining the organization.

Some 106 parliamentarians voted in support, two were against and four more abstained in the Thursday’s ballot on the resolution, which “calls upon national parliaments and governments of all EU countries to support Iceland’s objective of joining the European Union, asking the European Commission (EC) to state its opinion by the end of 2009 on Iceland’s readiness to open membership negotiations.” The majority of those against were Euro-sceptical MPs.

The resolution also recalls and appreciates Iceland’s support to the Lithuanian nation and country when Iceland was the first Western democracy to recognize Lithuania’s restored independence in 1990.

The parliament also expressed “hope that Iceland would be ready to start the talks in early 2010,” declaring determination to share experience of its EU accession talks.

Lithuania’s Foreign Minister Vygaudas Usackas is flying to Reykjavik later on Friday in sign of support to Iceland.

The Baltic state’s diplomats say that EU nations have not yet reached common grounds on the Icelandic EU membership application: Nordic countries have advocated urgent accession, while some Southern European nations do not want Iceland to be an exception and suggest it should be admitted according to regular procedures. In this case, Iceland would be in the same group of EU aspirants with Albania.

Last week, Iceland submitted an official application to the EU’s presidency Sweden on accession to the organization.

Source BNS

July 23, 2009 at 11:38 am Leave a comment

Lithuania’s great leap to the ‘dark ages’

A comment has been posted on this blog in relation to the recently adopted law on protection of minors against negative information.

“we have one more state which shares with us the Western liberal values. ”

LOL! Oh yes, please Mr Adamkus, tell us about your glorious “Western liberal values”.

http://baltictimes.com/news/articles/23212/

Doesn’t seem like the Baltic times agrees with this assessment.’

Here is what I would like to say on this issue:

I totally agree with you point and I am whole hart ashamed with this legislation, which by no any means does not correspond with the Western liberal values.  However, I would like to make few points here. 

First of all, Mr Adamkus has vetoed this legislation.  Nevertheless, Seimas with the majority votes over ruled the veto and adopted this law.  The law is not coming into effect any time soon.  From what I remember it suppose to come into force next year.

Second point is that our new President Grybauskaite has resolutely declared that she does not support this law, but regrettably she will have to sign it today.  The president will have to comply with the Constitution.

Thirdly, the Liberal movement has announced that it will initiate an appeal to the Constitutional Court, which will have to explain if the Law does not contravene with Constitution.  According to the Constitution the President could also put complain to the Constitutional Court on the same grounds.

Fourthly, the President has a Constitutional right to initiate amendments to a law.  Ms Grybauskaite mentioned that she will do just that, perhaps even during this session (the session will end on the 23 July) as Lietuvos Zinios paper wrote.

Lithuania’s society at large is still very homophobic and in majority supports this law.  However, the most upsetting circumstance in all this is that our politicians, even those who got their PhDs in Oxbridge in the UK, has also voted in favour of this law.  Instead of loosing some of its political capital by educating its electorate their confirmed with homophobic radical mullahs MPs.  This is really shocking, even though major papers but Respublika, which is homophobic, ultra nationalist, anti-Semitic, and anti everything, have condemned the law.

The EU, and the international organisations should keep condemning this act of barbaric medievalism and put a lot of pressure to the Lithuanian politicians.

July 17, 2009 at 4:11 pm 5 comments

New Lithuania President’s interview – her thoughts about past and present and vision for future

I would like to offer you an interview of Lithuania’s newly sworn President Dalia Grybauskaite.  The interview was published in the Lithuanian business daily Verslo žinios on July 13.  Verslo žinios names this interview as a Grybauskaite’s vision for her presidency.  I would highly recommend you to read it.

“Encompassing Ideals of Gandhi, Toughness of Churchill”

[Verslo žinios] Should the state limit its functions in a time of crisis or should it control the economy more?

[Grybauskaite] I think during an economic boom the state should limit its functions, and during a downturn it should be more active. I think history confirms this. Today we see that certain financial services were being developed faster than certain governments had predicted or anticipated. The Breton Woods safeguards and other mechanisms that had existed did not stop the crisis. It is necessary to look for something new. In the near future, governments will have to be more actively-involved in the markets. International organizations will have to get involved and participate in regulation as well.

[Verslo žinios] How do you imagine intervention?

[Grybauskaite] Theoretically, the free market system is a very good idea. In the global world, however, we witnessed the creation of global monopoly, not free market. Especially in the area of finances and financial instruments. This monopolistic system started controlling the global economy and market mechanisms. The free market system mutated. Governments and international organizations should create new mechanisms that would revive competition.

[Verslo žinios] What needs to be done?

[Grybauskaite] In the world there is a very interesting discussion: What can be done by big countries, which can fire up their money printing machines, and what can be done by small countries, which do not have resources or money printing machines. I think countries like Lithuania cannot increase public spending, deficit, and debt. Above all, they must reduce public spending and government apparatus and must eliminate overlapping functions of various institutes as well as obstacles for businesses. In addition, such countries must save. Small countries, which do not have resources and money printing machines, have only these options in addition to structural reforms. [passage omitted: The Baltic states should start recovering approximately six months after Europe's economic recovery].

[Verslo žinios] What reforms are the most necessary in Lithuania?

[Grybauskaite] Lithuania until now has been partially parasitizing and has been stuck in the old, inefficient economic structure. The economy lacks innovation and the service sector is underdeveloped. Our possibilities are innovation, services, science, and scientific research. Without abundance of natural resources, the biggest wealth one has is people, who must be valued. The problem is this: During the past twenty years we have freed the market and have reduced the state’s involvement in the economy, yet we have not reduced the state’s social obligations. The old style social security system that we have inherited does not go well with the market economy. During an economic crisis, this disproportion becomes an impossible burden for the state.

[Verslo žinios] Does this mean that in the future there will be smaller pensions, social payments, and assignations for education?

[Grybauskaite] I would phrase the problem differently. Society must decide anew what size taxes it is prepared to pay and what services it wants to receive from the state. Between these things there is a direct correlation. If one wants to maintain the same social system, one has to increase taxes. If taxes remain the same, the state’s obligations must decrease. Of course, even the funds the state has today can be used more effectively, too. For example, the latest study of the World Bank shows that our healthcare system looks like this: There are too many hospitals, there is too much equipment that is not used properly, because there are no specialists trained to use that equipment. Money disappears, but there is no impact.

[Verslo žinios] Unlike Latvia, Lithuania has refused to ask the IMF for help. You once said that such a step was unnecessary. Why?

[Grybauskaite] It is the last step a country can take. If external borrowing conditions do not get worse, Lithuania will still able to manage on its own. I do not want to criticize the IMF or the World Bank, but every politician should know that no one will solve our problems for us. I do not want to comment on Latvia’s problems, too much. I think Latvia asked the IMF for assistance when it had no other choice.

[Verslo žinios] The government completely ruled out the litas devaluation scenario and announced it would try to enter the euro zone in 2012 by reducing public spending. Do you support this strategy?

[Grybauskaite] I would not want to discuss concrete dates. However, the euro zone is synonymous with financial discipline. Order in our financial system must be the main paradigm of our thinking, as a real alternative to political populism. Concrete date for joining the euro zone will depend on the extent of the crisis and on our ability to have order. I also do not see any alleged benefits of devaluating the litas. Perhaps it would be meaningful, talking about increasing competitiveness of our exports. However, can you show me any markets that today are not gripped by recession? Therefore, devaluating the litas would only increase the country’s debt, two thirds of which are in foreign currency. In addition, energy resources would become more expensive. Therefore, we should move in the direction of euro adoption.

[Verslo žinios] Do you think Lithuania’s energy dependence on Russia is dangerous?

[Grybauskaite] Every country needs to strive to diversify its energy sources. Energy has always been measured using the geopolitical ruler. Therefore, integrating Lithuania’s electric power system and energy sources into Western networks would mean Lithuania’s political independence. It is necessary, and we will try to make sure we do not depend on one energy supplier.

[Verslo žinios] Does this mean that Lithuania must be prepared to pay higher prices for energy resources in the near future?

[Grybauskaite] Just as for any geopolitical choice. There is a certain price that needs to be paid for geopolitical orientation. Even if a competitive environment is established in Lithuania’s energy system in accordance with the EU requirements, the future of this sector will not be just a matter of economy or business. Of course, it is important to have a competitive environment in the energy market, but above all we must tame local monopolists and defend the consumer’s interests. Today in Lithuania, it is clear that local barriers are built against innovation and development of alternative energy sources.

[Verslo žinios] What is your opinion about the conditions for foreign investments in Lithuania? For example, Russian businessmen complain about discrimination here…

[Grybauskaite] The flow of investments, naturally, has subsided. The boom that started 15 years ago has ended. Yet, for now this is not too painful, because the lack of foreign investments in the country is compensated by the EU aid funds. Of course, we should analyse why the investment conditions have become worse. The Russian investments, meanwhile, are just as important to Lithuania as the investments from other countries. In certain areas non EU investments are limited and European interests are defended. The common EU investment policy is in the interests of Lithuania as well, but there is no national protectionism that would violate European principles.

[Verslo žinios] Have you heard any proposals to distance yourself from the executive branch and to remain a consolidating political figure, the way your predecessor, who was called “moral authority,” was?

[Grybauskaite] Political analysts say this is exactly what I should do. It would be nice to distance myself, point my finger, and criticize. I, however, see myself as someone who is not afraid of responsibility, and the first thing I will accept, if we work together with the cabinet, is responsibility.

[Verslo žinios] Perhaps today it would be meaningful to strictly adhere to the separation of power doctrine?

[Grybauskaite] It is an abstract theory. I know that today the nation entrusted a big credit of trust to me. Therefore, I want to talk about consolidating not only the government but also the public for big tasks. One of the most painful problems is the fact that the political elite have usurped democratic mechanisms. There cannot be a healthy economy, if the citizens’ power to make decisions is limited, and there cannot be a healthy economy without healthy politics. The decreasing interest in politics and lack of civic activeness is a problem not only in Lithuania, but also in Europe.

[Verslo žinios] All of your predecessors sooner or later started complaining about limited powers of the president…

[Grybauskaite] In politics there are de jure and de facto tools. Juridical tools are in the Constitution: The veto right, the right to initiate laws, the power to appoint officials. Factual tools – the nation’s trust, my word, which seems to have had substantial influence so far. Finally, I am also a professional in a certain field, which allows me to offer my help to the cabinet.

[Verslo žinios] Do you agree with those who say that every senior politician achieves the most important things during his first six months in office?

[Grybauskaite] This depends on one’s term in office (smiling)… Perhaps they are right: During the first six months one can look at things objectively, through a set of fresh eyes, before routine and system sucks one in. However, I think I clearly see the main tasks, which I raised not only during the election campaign, but also for myself. I hope that political and economic conditions will not obstruct their implementation.

Source BBC Monitoring

July 14, 2009 at 4:13 pm 1 comment

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