Archive for May, 2008
A deal to establish the Lithuanian Electricity Organization (Leo LT) was completed May 27.
The Lithuanian state and the private investor NDX Energija, signed a shareholders agreement and increased the authorized share capital of the Leo LT to 5 billion LTL (EUR 1.45 b) from 0.5 million LTL.
The government and NDX Energija transferred the ownership of its shares. The shares in the three companies were registered as being in the ownership of Leo LT with the country’s Central Securities Depository.
Leo LT has an authorized share capital of 5 billion LTL (EUR 1.45 b), divided into 500 million shares with a nominal value of 10 LTL each. The share capital was increased on May 27 through contributions in kind by the shareholders at an issue price of 14.28 LTL a share.
The government owns 61.7 % of shares in Leo LT and NDX Energija, owns a 38.3 % stake
The creation has opened the way for the country to start talks with Polish, Latvian and Estonian energy companies on building a new Nuclear Plant.
The Leo LT is to begin on June 16 formal talks with Polish, Latvian and Estonian energy companies to establish a joint venture for the construction of a new nuclear power plant. The Lithuanian Minister of Economy Mr Navickas said to the BNS “We will do all we can to ensure that the joint venture is established as soon as possible. The most important thing is not to lose our partners”.
In addition Mr Navickas said the government first wants to take decisions on the planned spin-off.
Under agreements on the establishment of Leo LT, the two power generating subsidiaries of state owned Lietuvos Energija (the Kruonis Hydro Pump Storage Plant and the Kaunas Hydro Power Plant) are to be spun off into separate companies within 24 months after the deal was finalized. The government will then take over the ownership of the plants for a symbolic price of 1 LTL.
NDX Energija, one of the two shareholders of Leo LT also intends to offer up to 1.5 % of shares in the newly established energy company for public trading.
Hence, It is unclear how LEO LT will start negotiations with Poland since Warsaw demands 1,000 kW from the New N Plant. The producing capacity of the new N Plant will be determined only after the environmental study that is due in August. Furthermore, Mr. Stankevičius the head of NDX Energija some days ago mentioned that if it will be difficult to negotiate with our future partners Lithuania would be fully capable of building a plant on its own.
However, this goes against the Lithuanian strategic purpose of connecting its electricity grid with the Western Europe via LitPol Link which was eventually (after 10 years) started last week. It is clear that the Poles are interested in building this link only if they are going to get enough electricity from the N Plant.
Clearly, the creation of the LEO LT will give a huge boost in the negotiations with the other partners. There were unsatisfactory noises from the other partners about the slow process of the LEO LT creation. The Lithuanian PM Kirkilas admitted that the Lithuanian side is late, but only two months behind the schedule.
Kirkilas is also convinced that the establishment of the LEO LT will give an advantage in arguing the case for prolonging of the old Ignalina for few more years. After meeting Barroso and Piebalgs on the sidelines of an international nuclear energy conference in Prague last week he said to the BNS that;
“In my view, we are making headway. They no longer say, as they used to say earlier, that there is nothing to speak about because it is Lithuania’s commitment to shut down the second block. Now they speak about the need to find a legal formulation and a solution for a possible extension of operation until 2012”.
The reaction from the Head of the EU representation Mr Sadauskas replied immediately; “No signal, not even the slightest one. The commitments remain in place”.
Some of the Lithuanian Commentators called the creation of the Leo LT as important as the sell of the Mažeikių Nafta oil refinery to the US Williams International. There was a lot of negative publicity against the sell off of the refinery since it was soled to the Americans rather cheep. However, it worked out well in the long run. Lets hope that the creation of the Leo LT will achieve its objectives, such like building the N Plant with the partners, connect Lithuanian electrical grid with Sweden and with Poland, and it will do it as quick as possible.
It is almost blasphemous to say, but it could be the case that the Sichuan Earthquake might turn into a positive development for China as it did for the USSR, after the Chernobyl disaster.
Many argue (including Gorbachev himself) that the disaster was the final nail in a Soviet system’s coffin. After seeing how the Soviet authorities dealt with disaster Gorbachev said to himself ‘that’s enough!’ The Glasnost policy followed later to evolve into Perestroika.
The Sichuan Earthquake unleashed the best qualities of the Chinese nation. Despite the heroic relieve efforts from Central authorities volunteers are organizing themselves in various forms to help the victims of the earthquake. This indicates that there is a lot of potential for the Chinese civil society on the grass root level. The simple folk are taking initiative in its own hands.
It is clear that China will never be the same again after the earthquake. It is hard to believe but possibly the Central Committee will realize that it is time to spread some powers and decision making to the grass root level.
I saw a documentary about the Leningrad Siege during the World War Two. One of the survivors made a shocking observation by saying that despite all horrors of the famine something was very different in the air. He said that since they were cut of from the main land Stalin’s Russia they felt that the ‘big brother’ is not watching that vigilantly. ‘Somehow we felt free’ he concluded.
Lithuania has been included in the 55-country list compiled by Swiss-based International Institute for Management Development (IMD) for the second consecutive year.
On the list, Lithuania lags behind Estonia, which ranks 23rd this year, one place below its 2007 position. Yet Lithuania scores better than EU fellows Portugal (37th), Hungary (38th), Bulgaria (39th), Greece (42nd), Poland (44th), Romania (45th) or Italy (46th).
However, Lithuania ranks the second in terms of women executives number and mobile subscribers number per 1,000 population, the third in terms of corporate profit taxation level, the fourth in terms of real GDP growth and short-term interest rates announced by the central bank, and the fifth in terms of patents issued to residents.
On the other hand Mr Marcus Svedberg of the Eastern Capital gave an interview to the alfa.lt on the status of the Lithuanian economy. Here are few points he made.
Lithuanian economy will not decline as much as that of Latvia’s and Estonia’s because the Lithuanian grew slower.
One of the most important factors for the rising inflation is the growth of the food prices. The inflation will continue growing and will start going down in the third and the forth quarter.
The State couldn’t completely control the inflation but it could effect it by reducing the state expenditure, freezing growth of the wages, lowering the taxes. But since Lithuania is entering the pre election period this is impossible. The next government could do that, since those measures could be best implemented at the beginning of the new government’s term.
Forecasts of 6-7% GDP growth for next few years looks just about right. However, it is impossible to predict how Ignalina’s closure will effect the economy.
We still invest in the commercial property as offices and wear houses in Lithuania.
The BNS reported that, as Lithuanian diplomats spoke up about attempts launched by some countries to revise agreements reached by four foreign ministers in Vilnius over the negotiations mandate on the European Union (EU) – Russia Strategic Partnership Agreement, Foreign Minister Vaitiekunas repeated that Lithuania is not going to back down on fundamental issues.
Lithuania blocked the commencement of talks with Russia, proposing to include four declarations in the negotiations mandate, i.e. the issue of cut-off oil supply via the Druzhba pipeline, the necessity to deal with frozen conflicts in Georgia and Moldova, cooperation in solving occurrences of Jan. 13th and the Medininkai massacre as well as support for exiled persons, who are returning to the Baltic States.
Foreign ministers of Lithuania, Sweden, Poland and current EU presidency holder Slovenia, decided in a meeting in Vilnius on May 11 to include issues brought up by Lithuania to be included in talks with Russia, however this agreement was not endorsed by ambassadors of EU member states in a meeting Tuesday. Ambassadors plan to continue discussions next week.
A Lithuanian diplomat announced this information to BNS May 14 that;”We eliminate such attempts. If they will continue, the mandate might not be approved by May 26 (GAERC)”.
Following a meeting with Lithuanian President Adamkus on 14 May, Vaitiekunas told the press of having informed the Head-of-State of receiving a few proposals by various countries with regards to the negotiations mandate, and they are currently being considered.
“A wide arsenal of different versions of what shape our answers might take is available, and they are currently being coordinated through diplomatic channels, however, when it comes to the main, primary, fundamental issues of Lithuania’s interests, we are not going to back down. (…) We are risking European solidarity”, the foreign minister asserted.
According to the BNS he also noted that the new proposals are most concerned with the issue of frozen conflicts and added that he can reveal neither who is making the proposals, nor what matter they concern.
“In general terms, I am telling you that yes, the main question under revision, is that of frozen conflicts, a declaration on frozen conflicts. Countries stand on different grounds when it comes to geographical and geopolitical positions. Take the United Kingdom, Spain, France – their interests are different and we are simply defending our interests by assuming this position here and now. The EU will have to go a long way in order to learn how to reflect interests unanimously and speak with one voice”, Vaitiekunas explained, noting that an acceptable compromise will be sought out on the issue.
The BNS writes that the minister also noted that he cannot yet reveal what form Lithuania’s demands should take on in the mandate, and in what phrasing should it appear. The minister said that this would mean having to reveal stances on the negotiations mandate and would therefore make them less efficient.
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.
As the BNS reported the opponents to recognition reminded that Lithuania is especially active in supporting Georgia’s quest to maintain control over the separatist Abkhazia and South Ossetia territories, however the country’s stance with regards to Kosovo is completely opposite. “Why don’t Lithuanians want to grant independence to Ossetians and Abkhazians, while they do so with the Kosovo Albanians?” one of the MPs noted.
As the BNS reported the supporters stressed that the Kosovo case is completely an exceptional one, as Serbia had undertaken repressions against its own citizens, which have to be protected by the international community. The others stated that given such animosity between the Serbians and Albanians, there is nothing left other than separating the two sides of the conflict with national borders.
This was a second attempt after a fiasco in April 1, when the Lithuanian Parliament failed to recognise Kosovo. One of the main reasons behind the failure was that those MP’s who supported the recognition did not participate in the voting and chose to celebrate their colleague’s Sabatauskas birthday instead.
The Vilnius Special Forces units were on alert since 2 am tonight. The two remaining Soviet statues in the centre of Vilnius were vandalised. Read full story and see more images of this accident in alfa.lt
I found about it this incident this morning, just before the military parade in Moscow. Watched all broadcast live on Russia Today. The Russian commentators only confirmed that the Westerners have a wrong image of the President Medvedev: he will defend Russia’s interests as firmly as the former President Putin. And by defending it means ‘expanding’ the ‘security’ zone around Russia.
Those who studied the Russian history a bit will understand that Russia suddenly feels a threat when it stops to expand. At the moment this expansion takes a place not through its tanks but through its banks. If the Kremlin wished to exhibit the real Russia’s mussel the tanks and the tactical missiles should have been replace by the Gazprom trucks carrying the pipes. The workers from the oil fields should have replaced the officers and the red flags should have been changed to the blue Gazprom flags. I am convinced that the new President would have felt much more comfortable observing his ex colleges saluting him.
The new Gazprom ambassadors to the EU such as Mr Schroder, the current Hungarian PM Gyurcsany, PM Berluscony, the ex PM Prodi, the Greek, Bulgarian and the Cyprus leaders should have stood next the President Medvedev.
The commentators kept explaining that this parade is designed for the internal public to foster Russia’s pride and to show that there is a capability to defend the country. However, it was broadcasted live on the Satellite TV channel. How local is that! However, those who know Russia, especially in the Baltic States are not concerned about those tanks too much. We are members of NATO after all. We are mostly concerned about the undercover Russian Army, the army of Gazprom, and what its forces doing in the Brussels, and the other Western European capitals.
The incident in Vilnius is disgusting; the hooligans should be caught and punished! Russia suffered a lot to the extent, which the Russians don’t realise themselves. The question is from what Russia suffered more, from the WWII or from the Stalin’s regime? Lithuania suffered much more from the Stalin’s regime, hence the end of the WWII symbolises to us the beginning of another and more bloody war. The war, which is unknown and took place behind the Iron Curtain. It should be taken into consideration that Lithuania has lost nearly a 1 million of its population between 1940 and 1953 that is from the beginning for the Soviet occupation until Stalin’s death. That is one third of its population, the absolutely best third of it! It is fear to say though that about 200.000 of those were the Jews who perished in Holocaust.
Perhaps we should keep those statues on the Green Bridge to remind us what had happened to our country. Such reminders should not let us to relax too much in planning our future. Or better, the Soviet solders’ uniforms on the statues should be upgraded and replaced by the Gazprom uniforms. And I am very happy that the former President Putin brought back the old Soviet National Anthem and made it to the Russian Anthem. Every Lithuanian who hears this music feels shivers, that also keeps us alert. Hence, Welcome to the 21-Century!