Posts filed under ‘Oil’

Will the Poles sell Orlen Lietuva to the Russians?

The Lithuanian media announced that the Polish PKN Orlen is considering selling Orlen Lietuva refinery (former Mazeikiu Nafta) if it will fail to secure control over Klaipedos Nafta oil terminal.

According to the Polish daily Parket the most logical buyer of Orlen Lietuva would be a company from Russia.  The paper quoted Pawel Burzinski, an analyst from BZ WBK saying, ‘”The sale of Mazeikiai is a very possible development if it will emerge that PKN Orlen has failed to agree with Lithuania’s Government. The sale of Mazeikiu Nafta may be launched by the decision of the concern’s (PKN Orlen) board.”

Mr Burzinski thinks that the sell off scenario could be such that in the first stage of it some 10-30 pct of Orlen Lietuva could be offered to an investor with an option of increasing its stake to more than 50 pct.  In analysts’ opinion, then, the PKN Orlen eventually will withdraw from the shareholders of Orlen Lietuva.

Lithuania’s Government, on the other, regards the Klaipedos Nafta as a strategic object and has not intention of selling it to any other company.  According to the TV3 programme Savaites komentarai on 24 January, the Polish PKN Orlen is planning to sell Orlen Lietuva to Russia’s  Lukoil.  However, the Russians would buy Orlen Lietuva only if the company ‘Klaipedos Nafta’ is included into the ‘package’.

Read all article…

February 2, 2010 at 6:02 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

Lithuania is Among Top Five Enemies of Russia

Lithuania is among the top five enemies of Russia. This was revealed by a recent public opinion poll in Russia. One can say that the notion of Lithuania as an enemy was inculcated into the heads of common Russians by the Kremlin’s propaganda. This is true, but it does not change the essence of the issue. Unlike in 1990-1991, today Lithuania would not be able to count on moral support from Russians, which was one of the reasons why we were successful in our quest for independence. Later, when we were negotiating over the withdrawal of Russian troops from Lithuania, favourable opinion about us among common Russians was also a very important factor.

Even ten years later, when we were trying to join NATO, one of the arguments our politicians and diplomats used in the talks with the Western partners was a poll that showed the majority of Russians did not object to our membership in the alliance. The poll also said that our membership in the alliance would not harm Russia’s relations with NATO, something Moscow’s politicians were trying to claim. Therefore, Russian politicians drew certain conclusions and started fixing the mistake of their propaganda, which at that time still counter-positioned the “good” Lithuania against the “bad” Latvia and Estonia.

Thanks to the efforts by the Kremlin’s propaganda masters, in 2004-2005 Vilnius got involved in a fierce verbal war against Moscow. The war lasted till 2008 and did not produce anything good for Lithuania: The Druzhba [friendship] oil pipeline was not reopened, the talks over compensation for the occupation damages did not commence, the Medininkai murderers were not extradited. The only thing we achieved was the loss of allies in the EU.

Russia, meanwhile, gained a strong argument in the discussions with the EU and NATO. From dawn till dusk the EU and NATO were told: “Did we not tell you that by accepting those intrigue-loving Baltic states, you would gain a source of constant disagreements with Russia?”

In 2004-2005, Russians’ opinion about the Baltic States, Poland, Ukraine, and Georgia has started to get worse. This showed that harming the ties with the closest neighbours in Eastern Europe and the former Soviet Union was a deliberate and pre-planned policy of Moscow.

A fruit of this policy could be observed in May 2007, when during rioting by Russian-speakers in Tallinn hundreds of thousands of Russians, without having been urged by anyone, got involved in cyber attacks against Estonian websites. A year later, we witnessed another result of this policy in Georgia. That time, as the Russian tanks were rolling towards the neighbouring country, not only Vladimir Putin, but also millions of Russians, overcome by chauvinistic orgasm, were demanding to hang Mikhail Saakashvili “by his balls.”

If the Kremlin started some sort of a political or economic pressure campaign against Lithuania, the support from Russian citizens would be just as enthusiastic.

Source BBC Monitoring

June 20, 2009 at 11:08 am Leave a comment

Russia will decide whether we Lithuaina will have electric power

I would like to present you with absolutely brilliant analysis of the current and the short-term Lithuania’s energy market situation.  This article was written by Audrius Paciulis and published in the weekly ‘Veidas’ on September 15.

It is very likely that Lithuania will have a shortage of electric power in January-February 2010.   From 1 January 2010 – the time by which the Ignalina Nuclear Power Plant (IAE) has to be decommissioned – the main raw material for production of electric power in Lithuania will be natural gas imported from Russia. Even if its price does not go up, (which is highly unlikely), still, the main electric power producers in the country will be thermoelectric power stations, including the biggest power station located in Elektrenai. The price of electric power produced by this power station is four times higher than the price of the electric power produced by the main electric power supplier so far – the IAE.

A parliamentary election campaign has started in Lithuania. This is why all the political parties, including the government, are working in the election mode. This means that all their time and effort is dedicated to the election campaign and to the meetings with the electorate, and the routine work is ignored for the time being. The problem is that some issues that are vital, for example, the supply of electric power after the shutdown of the IAE, cannot be ignored.

November 2008 is the deadline for the Lithuanian thermoelectric power stations to inform Gazprom about how much gas they are going to purchase in 2010 and later on, when these power stations will be burdened with the responsibility to provide Lithuania with electric power. In order to do that, the thermoelectric power stations need to receive a clear reply from Leo LT how much energy and from which suppliers – thermoelectric power stations, hydroelectric power stations, or other suppliers – it is going to purchase electric power, and how much of this electric power it is going to import. However, just like its predecessor, the Lithuanian 0.3 TWh.

Moreover, we need to take into consideration that the Scandinavian electric power is produced mostly by hydroelectric power plants. It is cheap only during the rainy periods, but it is not cheap in winter, when Lithuania needs the electric power the most. We could import some more electric power from Latvia, which launched a new thermoelectric power plant with the capacity of 400 MW, and which is in the process of building another generator of the same capacity.

Of course, we can assume that when the economic recession starts and the prices of electricity go up, the residents and the industries will start saving energy, and the need for electric power in 2010 will be less by at least 1 TWh than forecasted (especially if nature has mercy on us and the winter is mild). It is very likely that Lithuania will have a shortage of electricity in January-February 2010. Of course, the consumers may not necessarily feel this shortage, but businesses (especially the companies that do not have their own power plants) will have to go on an electric-power diet.

And the most important thing is that after we shut down the IAE, which produces cheap electric power (the electric power purchased from the IAE costs 6.8 cents per kWh), the price of electric power will undoubtedly double, because the cost price of the electric power produced by the Elektrenai thermoelectric power plant, if the prices of gas remain at the same level, is about 27-36 cents per kWh. If we add to the cost price the 21 cents per kWh for supply and distribution, the 8 cents per kWh of pollution tax, and another 3 cents per kWh of the price increase because the Kruonis hydroelectric power plant changed its status and because there are plans to increase the prices of the electric energy distribution and transfer in 2010, we will have to pay at least 59 cents per 1 kWh of electric power (current price the private consumers pay is 33 cents, including VAT; business companies pay more Lietuvos Energija, LEO LT is not providing the electric power producers with this information.

“This is a traditional scenario and a traditional problem,” one well-known energy specialist told Veidas. “Lithuanian Energy used to do the same. First it would say it was planning to purchase electric power from the Elektrenai and other thermoelectric power stations. It would demand lower prices, and then, the very last moment, it would announce that it agreed with Russia on the import of a cheaper electric power.

As long as the IAE, which produces two-thirds of all the electric power generated in Lithuania, is in operation, such a scenario is possible. But the situation will change radically after 2010, because the main electric power producers will be the power stations working on gas on oil. And these power stations need to take care of their supplies in advance, because the gas supply contracts are made in advance, and it will not be possible to suddenly purchase a big amount of energy resources (or at least cheap energy resources) from Russia, because it itself is f! acing a shortage of electric power, especially in winter,” he added.

If the Elektrenai thermoelectric power station is working at full capacity, it can produce up to 8 TWh [terawatt hours] of electric power per year, and thus compensate for the capacity that will be lost after the IAE, which is producing up to 9 TWh per year, is closed. If we add the capacity of other power stations, Lithuania will be able to produce up to 11.23 TWh of electric power in 2010, which is the capacity we will need in 2010.

However, this means that a considerable increase in gas import will be needed to ensure that the thermoelectric power stations can work at full capacity. The increase should be from the current 0.7 billion cubic meters to 2.3 billion cubic meters of gas import in 2010. This means that the total Lithuanian import of gas will have to be increased from the current 3.03 billion to 4.9 billion cubic meters.

Theoretically speaking, there is such a possibility. The former chief of the State Prices and Energy Control Commission, Professor Vidmantas Jankauskas, told Veidas that when Lithuanian Gas was privatizes, it was agreed with Gazprom that it would guarantee gas supply until 2015. Moreover, there is a possibility to increase the volume of the gas import to 6-7 billion cubic meters.

But there are two problems. The first one is that the capacity of the gas supply network that is used to deliver gas to Lithuania and Kaliningrad is not sufficient to double the throughput. It would take about 1 billion litas of investments to increase the throughput. But we have not heard so far about any steps taken by the government in this direction, even though this need was expressed in November 2007, during the meeting of the parliamentary committees on European affairs, foreign affairs, and economy.

The second problem is that we should negotiate with Gazprom the already rapidly growing need for gas supply now, so that we could reach an agreement in November. But the government is busy with the parliamentary elections, or does not have time, or does not see why it should take care of that, hoping to pass on this headache to the new government, which will be formed after the elections.

The Prices of Electric Power Will Double
And that is not all. We need to negotiate the much higher volume of gas import, and we need to negotiate the import of electric power, because up until now Lithuania has been importing the electric power it needed on an annual basis. So far, the biggest electric power exporter to Lithuania was Russia. For example, we are planning to purchase up to 1.25 TWh of electric power this year. A small amount of electric power is purchased from Latvia (during the high-water season, when the Riga hydroelectric power plant is working at full capacity).

After we build the electricity link with Sweden, we will be able to purchase more electric power from Scandinavia. The import of electric power was compensated for by the export of the cheap electric power produced by the IAE. But starting in 2010, when the IAE is closed, the forecast volume of import [as published] will decrease drastically from 1.42 to 0.8 TWh.

Moreover, we will have to look for other electric power suppliers. Russia, which according to forecasts will be consuming more electric power and will face a shortage of generating capacity, will be able to sell us only about 0.2 TWh (which is six times less than it sells us now). The import of electric power from Scandinavia should grow, from the current 0.06 per cent to 0.42 TWh.

The specialists who advised Veidas on the issue warn that the intention to purchase so much electric power from Scandinavia may turn out to be too optimistic. In their opinion, a real expectation would be a mere 0.1 TWh, in exceptional cases – up to Moreover, we need to take into consideration that the Scandinavian electric power is produced mostly by hydroelectric power plants. It is cheap only during the rainy periods, but it is not cheap in winter, when Lithuania needs the electric power the most. We could import some more electric power from Latvia, which launched a new thermoelectric power plant with the capacity of 400 MW, and which is in the process of building another generator of the same capacity.

Of course, we can assume that when the economic recession starts and the prices of electricity go up, the residents and the industries will start saving energy, and the need for electric power in 2010 will be less by at least 1 TWh than forecasted (especially if nature has mercy on us and the winter is mild). It is very likely that Lithuania will have a shortage of electricity in January-February 2010. Of course, the consumers may not necessarily feel this shortage, but businesses (especially the companies that do not have their own power plants) will have to go on an electric-power diet.

And the most important thing is that after we shut down the IAE, which produces cheap electric power (the electric power purchased from the IAE costs 6.8 cents per kWh), the price of electric power will undoubtedly double, because the cost price of the electric power produced by the Elektrenai thermoelectric power plant, if the prices of gas remain at the same level, is about 27-36 cents per kWh. If we add to the cost price the 21 cents per kWh for supply and distribution, the 8 cents per kWh of pollution tax, and another 3 cents per kWh of the price increase because the Kruonis hydroelectric power plant changed its status and because there are plans to increase the prices of the electric energy distribution and transfer in 2010, we will have to pay at least 59 cents per 1 kWh of electric power (current price the private consumers pay is 33 cents, including VAT; business companies pay more).

Source Veidas and the BBC Monitoring Service

September 23, 2008 at 6:55 pm 2 comments

NATO to the Balts – don’t worry, you are safe! Really, are you sure?

Perhaps it might be a gross exaggeration but the future historians will put a date of 08-08-08 next to the fall of the Berlin Wall, the 9/11 or a recent financial melt down.  Those dates marked a tectonic shift in the world politics and economics.  We can say, ‘yes, the world is not the same anymore’.

This date is not only about the Beijing Olympics, which mostly were pushed down because of the South Ossetian war  (I don’t think that the Chinese will ever forgive the Kremlin for that!).  I don’t want to argue who started the war, the most important what happened after.  The nightmare scenario is unfolding in the front of our own eyes and worst predictions of the ‘Russophobe’ Balts and Poles are coming true.  Far worst than that!  Who could predict in August 1 that Russia’s troop will be stationed some 50km from Tbilisi?

After joining the NATO the ‘Russophobe’ Balts began to take it for granted that they are save as long as the NATO exists.  Lithuanians even have the President’s G.W. Bush’s words on the wall of the Town Hall of Vilnius saying that that who will choose Lithuanian as an enemy will choose the USA as the enemy also.  He said that in 2003 from steps of the same building to the thousands of Lithuanians.  All of us took it for granted, like a confirmation, which we needed so badly.

The Lithuanians were so keen to join the NATO that effectively we adjusted our military to the NATO requirements to such extend that we came to realise that we don’t really have a territorial defence anylonger.  We have battalions who are ready to be deployed in the NATO special operation and the peace keeping missions in far far faraway countries.  There is a sad joke that those Lithuanian battalions could later be successfully deployed here for the peace-keeping mission, as the NATO peace keepers.  They will be perfectly fit to monitor how Russian military comply with its obligations in Lithuanian territory after a similar Georgia style blitz Krieg.

Should we be concerned about our security?  After all we are the members of the strongest military alliance, and there is an article 5, which will protect us.  Perhaps this question could be addressed to our allies.  According to various estimates the Russian army will need some 24 hours to take the Balts.  Will the Portuguese, Spanish, Belgium Dutch, or lets say Italian or German (in that matter also the French) will start a war with Russia?  What would Berlin, Paris or Rome say in that case?  Well, same as now – lets be pragmatic, lets don’t annoy our neighbour.

Lets us just assume that the Russia’s army will enter the Baltic States in December, why not during Christmas!  Would the above-mentioned capitals, risk retaliating in the face of the possible threat of a total Russian Gas cut?  Can Russia survive without the petrodollars for lets say 5 months?  Yes, it can.  Could the EU survive 5 colders months without the Russian gas?  It is possible but it would be extremely difficult.  The mutual Russia/EU dependence is a myth lets admit that for once.  This myth is based on assumption that the Kremlin became predictable and began to realise the benefits of conducting business in the Western standards.  The 08/08/08 only showed that Russia us unpredictable as ever.

One of the aims to go to the war with Georgia was to undermine NATO’s reliability.  First of all amongst the NATO hopefuls.  Then of course amongst the new NATO members.  Many questions are asked in Lithuania now.  During his trip to Tallinn a NATO General confirmed that there is the NATO plan to defend the Baltic States.  However, few days later in Vilnius he informs the journalists that his words in Tallinn were misinterpreted.  The Lithuanian electronic media is full of the articles published in the USA and European media calling for NATO to ‘do more in the Baltics’.  The German Sueddeutsche Zeitung quoted the Lithuania’s President saying, “If some out of they mind Russians planned an intrusion into our country, the occupation would be a matter of a few minutes.”  Latter the President’s press office issued a statement informing that he said ‘24h’ not ‘a few minutes’.  Well, 24 hours is much longer than few minutes but is it long enough to gather the top rank NATO generals for a meeting to discuss the response to the attack?

Theoretically the Article 5 has never been put in practice (post 9/11 was a different case).  This article is an essence of the alliance even though it could be argued that NATO has turned into a political club.  If the Article 5 would be breached that would bring NATO to its end.  Is it in Russia’s interest to break NATO up?  Yes, it is at least in the short term, since at the moment Russia is in peak of its strength due to the geopolitical shifts.  It is now or never to correct the mistakes which brought the ‘biggest Geopolitical tragedy of the 20 Century’.  The author of those words is doing just that.

Fantastic journalist and publisher Edward Lucas is calling the Balts to calm down, Russia should not attack us.  Mr. President Adamkus in the same interview for the Sueddeutsche Zeitung also noted that it is very unlikely that we will be attack militarily.  He noted that Russia will cut us off Lithuania the main energy supplies route, then will start interfering into our economy stronger and eventually will interfere in our politics.  On October 12 Lithuania is holding a Parliamentary elections.  The interesting times are ahead.  Meantime I would like to agree with Mr. Philip Stephens from the FT.

September 21, 2008 at 5:25 pm 3 comments

Lithuanian diplomacy achieved a victory over the EU-Russia Partnership Agreement

Lithuania was the sole of 27 EU member states, represented in the European Union’s (EU) General Affairs and External Relations Council’s (GAERC) session in Luxembourg last week to dissent to the proposal to begin talks with Russia over the new partnership agreement.

The countries decided that EU-presidency holder Slovenia’s Foreign Minister Dimitri Rupel arrived to Vilnius to further harmonize stances on the issue.  Amongst those who arrived to Vilnius were the Swedish and Polish Ministers of Foreign affairs.  However, another issue for the Lithuanians was of another importance, expression of support to Georgia.  The plan was that all ministers should visit Tbilisi on Monday and show their support to Georgia.

However, the Lithuanian diplomats had have heard a warning from Slovenian Foreign Minister Dimitri Rupel that he would accompany his Lithuanian, Polish and Swedish colleagues to Georgia only if Lithuania abandoned its proposals to the mandate of strategic talks between the European Union and Russia.  An anonymous Lithuanian diplomat expressed his disappointment by saying “How can one propose such exchange? It is incomprehensible whether the proposal from the European Union’s presiding country Slovenia indicates the entire EU’s stance on Georgia or is it a lame Slovenian proposal aimed at forcing Lithuania to give up its legitimate requirements in the discussion of the negotiating position of the EU-Russian strategic partnership agreement”.

However, after discussion in the Stikliai hotel the Lithuanians claimed that the EU had agreed with all Lithuanian propositions with some amendments.  The Lithuanian FM stated that the EU solidarity exists not only in declarations but also in reality.  Still he remained that the positions will have to be agreed with the other 23 Member States.  The Slovenian MF noted in the press conference that: ‘All Europeans States and the EU Members understand Lithuanian position.  And I can easy tell that I understand the Lithuanian concerns’.  So, what are those demands?

As Lietuvos Rytas daily wrote last week, Lithuania decided not to approve the mandate for the EU-Russia negotiations until this mandate reflects Lithuania’s interests. This was the first time Lithuania has dared to fight for its interests in the EU with such fervour.

Vilnius demands to add to the energy declaration Russia’s commitment to observe the requirements provided for in the Energy Charter Agreement.

Moreover, Lithuania wanted the EU negotiations mandate to include the point that Russia should cooperate more actively in the field of renewing delivery of crude oil via the Friendship (Druzhba) Pipeline. This pipeline was closed in 2006 for “political repairs.”

As the Lithuanian Minister of Foreign affairs noted “Druzhba was cut off without an explanation. (…) We are worried that Russia is creating a precedent. Energy security and creating a precedent are issues of interest to the EU. This is not a bipartite issue. And we believe that the question of a precedent, and of how far one can go in not cooperating with one EU state is important to the entire EU as well. We have an alternative for Druzhba, but not one for gas”.

Lithuania also noted that Russia’s attitude toward its neighbours is related to the security of Lithuania and the entire EU. This is why Lithuania proposes a declaration on Georgia and Moldova.

Moreover, Lithuania would like to have a declaration on legal cooperation, which should promote constructive cooperation in the investigations of the 13 January 1991 events in Vilnius and the 31 July 1991 massacre in Medininkai, as well as of the disappearance of EU citizens in Russia.  There is also an ongoing case of disappearance of Lithuanian businessmen Mr Jucys in Kaliningrad a year ago.

Lithuanian is also seeking to add an additional declaration to the negotiations mandate to compensate for the damages incurred by the persons deported from the occupied Baltic countries. Ensuring such support to the deported persons was one of the international commitments Russia undertook when it joined the Council of Europe.

Lithuania does not impose demands on Russia. It urges the EU to protect Lithuania’s interests, the same way it protects the interests of other EU members.  Lithuania is not trying to change Russia, it is impossible, it simply tries to change the EU attitude towards Russia, in sake of the EU.

The another point is that Lithuania is a Member State, the same as Germany, France, Italy, Cyprus, Greece, Poland or Ireland who are also defending their interests by blocking decision making.  However, Lithuania is standing not only for the ‘meet’ as the Poles did, but for the values of justice.

Lets see how it will go.

May 12, 2008 at 12:02 am 2 comments

Adamkus interview to the Swedish SR. Updated – ’We will try to expand lifespan of the old Ignalina nuclear plant’

Sveriges RadioThe Lithuanian President Valdas Adamkus gave an interview to the Swedish National Radio SR.

The main topic of the interview was a closure of the Iganalina Nuclear pant.  However, the president stated that there are signs that the European Union may consider Lithuania’s request to extend operation of the Ignalina N-plant after year 2009, by which time the plant should have been closed.

As the BNS noted the President said that “I’ve heard very encouraging first signals that they (EU – BNS) are considering reviewing some clauses. (…) Probably in the interest of Lithuania’s request, should it be submitted. (…) We can at the least start a dialogue”,.

The Lithuanian President said he sees no reasons why governments of other Baltic Sea region countries wouldn’t back Lithuania’s wish to extend the operation of the Ignalina N-plant. In the opinion of Adamkus, such actions would be egoistic and illogical.

Furthermore, Adamkus emphasized that the period between year 2009 and the time when the new N-plant – still in planning stage – would begin operations, would be of detriment to the development of Lithuania and the entire region and would further digress the country from European economic standards.

After the closing of the Ignalina N-plant, Lithuania would be at a shortage of 1.4 b kilowatt electrical power per year.

However, as the BNS informed the President notes that should Brussels decide against the extended operation of the Ignalina N-plant after all, Lithuania would apply its international undertakings. Lithuania committed to closing the Ignalina N-plant, which contains a Russian RBMK type reactor – deemed unsafe in the West – after its accession to the European Union (EU).

When talking about Lithuania’s joint plans with Latvia, Estonia and Poland to build a new power plant, Adamkus admitted that the process has been delayed; however didn’t agree that these intentions are only talks. The president noted that constructive preparation works are underway.

When asked whether the larger EU countries provide enough support to Lithuania in its relations with Russia pertinent to energy supply, Adamkus said he believes that there is enough support and understanding on Lithuania’s position.

Lithuania, just as its neighbours Latvia and Estonia, is referred to as the European Union (EU) “energy isle”, because it is entirely dependent on resource supply from Russia, and projects of links with the energy systems of Western Europe are still in the stage of discussions and negotiations.

The President also noted that his French colleague Nicolas Sarkozy is planning to visit Lithuania in the period of the next two months.

The French president was invited to visit the Vilnius Conference on Energy Security, which took place last Oct., however Sarkozy went to meet with Russia’s President Vladimir Putin at that time instead.  Asked to give his reaction to this Mr. President ironically noted that he could not compete with the Russian President.  He asked the journalist ‘If you got an invitation for an interview from Mr Putin and myself at the same time I would not doubt that you would chose to go to Moscow.  Lets be practical about it’.

Listen to the interview in English     

January 26, 2008 at 3:37 pm 2 comments

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