Archive for December, 2008

Lithuania; the IMF verdict

EquallThe the International Monetary Fund (IMF) has completed its routine mission to Lithuania and delivered a verdict.  Even though its statement begins with ‘The Lithuanian economy faces challenges’ it continues by saying that ‘Bold upfront policy actions and contingency planning will help Lithuania to address these challenges’ concludes that ‘mission welcomes these (Central Bank of Lithuania) prudent measures’.

As the BNS noted Catriona Purfield, the head of a visiting IMF mission said today that Lithuania has no need to borrow money from IMF at the moment: “We do not see a need for Lithuania to borrow from the IMF. The authorities have not requested aid”.  Hence, a public message made by some politicians few weeks ago about a possible borrowing from the IMF was premature.

The IMF has also ‘lifted’ the Lithuania’s GDP growth for year 2009.  Even though this prediction could change the IMF thinks that the GDP will contract ‘only’ by 2 percent, not by 4.8 percent as the Ministry of Finance announced few days ago.  The SEB banks outlook, which was published today, has also confirmed the IMF predictions for Lithuania.

Another valuable information is that Lithuania is not planning to devaluate its currency Litas.  As the BNS mentioned Kubilius said that the fund’s representatives agreed that Lithuania did not need an IMF loan to solve the problems it could face. “Today we agreed that we are not planning and will not be planning any currency devaluation. Currently, we are not holding any consultations as to borrowing from the IMF to solve our problems,” he said.

The PM concluded that “The IMF gave positive marks to the steps we are taking and to our plans, which allows us to look to the coming year with reserved optimism,” as the BNS writes.

About 15 minutes ago the Parliament agreed to put the Budget 2009 for the discussion in the Seimas committees and in the political factions and meet on Monday to have a final reading before adopting it.  The plan is to adopt the budget before Christmas.


December 16, 2008 at 7:36 pm 2 comments

A grim economical situation in the good hands

The new Centre Right Government has approved a new Budget for 2009 today even though it is encountering even more grim statistics than it expected.  Almost eight years of the Centre Left ruling, with the Social Democrats being in charge of the Governments, has left Lithuanian economy in lets put it mildly, in a grun situation.

The new opposition leader MP Kirkilas, and the former Prime Minister still maintains that the new government is too pessimistic and that the economical situation is not as bad as the Conservatives portray it.

As the BNS reported the previous government of Kirkilas has left behind one billion LTL (EUR 297.4 mln) in debts plus over a million litas in overdue VAT refunds to businesses.

There are even delays in paying salaries and social benefits, as well as in paying for goods and services.

The new Finance Minister Semeta said to the BNS that the new administration will make every effort to ensure that debts to businesses are repaid as soon possible, but added that they will need the parliament’s help in passing certain legislative amendments that would allow the state to save more money, as proposed in the government’s program and its anti-crisis plan.

Social Security and Labour Minister Rimantas Jonas Dagys said, “Payments in the social sector are five days overdue.”

National Defence Minister Rasa Jukneviciene informed the parliament that she has inherited 150.4 million litas in debts from her predecessor.

Heath Minister Algis Caplikas said that the debt left by the former administration in the healthcare system amounts to 43 million litas writes the BNS.

The BNS also informs that the Lithuanian central government’s budget revenue for 11 months of this year fell 589.6 million litas (EUR 171 mln), or 3.2 percent, short of target.

Budget revenue for January through November came in at 17.818 billion litas, compared with the projected revenue of 18.408 billion litas BSN informed.

Revenue for November alone reached 1.394 billion litas, 15 million litas short of the 1.409-billion-litas estimates.

Overall budget revenue for the 11 months, including 3.248 billion litas in EU assistance money, amounted to 21.066 billion litas. Total revenue for November, including 149.3 million litas in EU aid, came to 1.543 billion litas.

Further more, few days ago the Ministry of Finance announced that they project a negative GDP 4,8 percent growth in 2009.

The newly elected Prime Minister Kubilius his duties began not in his office in Vilnius but in EU President’s Borroso office in Brussels.  The newly baked PM brought a message to Brussels that Lithuania has an anti-crises action plan.

After meeting with the EU Commissioner Joaquin responsible for Economic and Monetary Affairs, Joaquin Almunia on December 11 Kubilius said to BNS: “There is common understanding that we should consolidate the fiscal situation rather than ponder upon fiscal stimulation and promotion of consumption – the path chosen by some other nations of the EU. It would serve as a poison to us”.

After meeting with Almunia, the Lithuanian PM attended a session of Nordic and Baltic prime ministers, which, in his words, addressed regional cooperation in the face of the crisis.

“There is a perception that all countries in the region should take part in the efforts to resolve problems of the economic and financial crisis. Already there are reports that Sweden has pledged regional support to Latvia. I believe it is a serious signal to us all, although we do not need financial assistance yet, however, the ideological and solidarity support is very important,” Kubilius concluded to the BNS.

The latest news that the IMF has finished its routine work in Lithuania and tomorrow will talk in detail about it with the authorities.  According to the first reactions the IMF has positively evaluated the anti-crisis plan.  According to the Lithuanian authorities there was no talk about a possible loan from the IMF.  MP Glaveckas, who is also the Head of the Seimas’ Finance and Budget Committee, said that Lithuania is in talks with some Japanese and the Chinese financial institutions about a possibility of a loan.

Any talk of Litas’ devaluation is considered to be not serious and such an opinion is marginalised in the Lithuanian media.  The situation is grim, however the government is in good hands.  Tomorrow the government will present the new budget to the Parliament.  The plan is to adopt the new budget this year.

December 15, 2008 at 10:43 pm Leave a comment

Respect to the German Times!

On November 23 I had published a letter to the German Times informing the editor that an article in the paper’s November issue misinformed its readers about the results of the last Parliamentarian elections in Lithuania. The article stated that the Lithuanian voters voted in favour of the Eurosceptic parties.

I would like to hail the German Times that it published a fragment of my letter in the December. This act only confirmed my conviction that the paper has integrity and is a very decent publication, which also respects a different opinion. Respect to the German Times.

December 10, 2008 at 9:25 pm Leave a comment

Lithuania will talk to the IMF about a possible loan

arrow-downThe incoming Lithuania’s PM yesterday (Dec 1) was still maintaining that Lithuania will not ask the IMF for a possible loan, because there is not necessity for that.  “Such borrowing would mean that we are declaring ourselves a disaster area,” he said to BNS, adding that going to the IMF for loans could scare away potential investors and would place restrictions on the authorities.

However, that was yesterday.  Today it appears that the new PM could ask for a loan.

But only factors outside the government’s control, such as a deeper crisis in Latvia or Russian, could force Lithuania to turn to the IMF for help the MP maintained.  “Then we will be dealt blows that will be really hard to withstand,” Kubilius told BNS on Dec 2.

He said that there were no discussions yet as to what amount of money Lithuania could have to borrow from the IMF.  The incoming government plans to discuss a crisis management plan and planned structural reforms, as well as further cooperation with the fund, with members of a regular IMF mission due to arrive in Lithuania on Saturday.

A candidate to the Minister of Finance Mr. Algirdas Semeta, did not rule out on Dec 2 that the country might have to go to the IMF for financial aid, but said that would be “the last step” in trying to stave off an economic crisis.

“I do not rule out the possibility that such a situation could arise,” Semeta told reporters after meeting with President Valdas Adamkus, BNS informed.

Semeta said that “The [ruling] coalition’s position is that this [borrowing] would have to be the last step should we have to make it. We hope that there will no need to take this step”.

Some of the commentators suggested that the ‘Crises management plan’, which almost completed has being created to fulfil the IMF loan criteria in the first place.  However, incoming cabinet ridiculed this assumption.  I am sure there are some more interesting new to come.

December 2, 2008 at 11:53 pm 2 comments

Allan Alaküla on the Baltoscandian TV Channel – an Estonian view

BaltoscandiaDuring the last Baltics’ Prime Ministers meeting in Tartu Lithuanian acting PM Kirkilas has suggested to create a Pan Baltic TV channel.  Previously, Lithuania’s president Adamkus suggested the same during his visit to Tallinn.  The Baltic Prime Ministers agreed to create a working group, which would discuss the idea.I touched upon the idea in 18 Feb post.  Few days ago the post received a very interesting comment from an Estonian Mr Allan Alaküla, who actually expanded on idea and suggested to create a Baltoscandic channel.  Allan Alaküla is currently working as a as Head of Tallinn EU Office in Brussels and kindly agreed that I would post his comment as a separate post.  Lets hope that the working group from the Baltic states will manage to generate some ideas and will achieve something concrete results.WHY BSR NEEDS CHANNEL?
BBC World, al-Jazeera, Russia Today, China´s CCTV9, Spain’s TVE International, France24 and other global reaching TV channels are a challenge to the media-rich Baltic Sea Region (BSR). The countries around the Baltic Sea have strong public service broadcasters and well developed private media with the world’s highest readership of written press and very high Internet usage. There are some pan-Baltic media and pan-Scandinavian media cooperation, but there is none remarkable media outlet which addresses the entire BSR or present the region to the outside world.



The EU BSR Strategy should set a target of founding a central media channel with remarkable share inside the BSR. The Baltic Channel would serve as a vibrant tool for building an internal identity of the region and for presenting the image of the region to the outside world. The Baltic Channel should be a multimedia outlet built on the latest technique for TV, web and mobile.

Such a BSR channel could serve as a model for European Union identity-building. Unless there are no effective media targeting the entire Baltic Sea Region, there are very small chances to form an identity of the region as such. The same is true of the EU as long as Euronews or any other pan-European media outlet does not compete with major national channels over the share of viewer ship.

1. The BSR is media-rich. It has probably got the world´s strongest public service broadcasters (PSB) in terms of share in respective nation states. But it has also got a very well developed private media sector with the world´s highest readership of written press and very high Internet usage. This would serve as a perfect environment for an extensive use of media with the aim of forming a common identity for a relatively diverse region of nine countries.

2. Private media is already highly integrated in the BSR with regard to ownership structure. Norwegian Schibsted and Orkla, Swedish Marieberg, semi- Swedish Viasat (MTG) and German and Finnish multinational media companies already operate in large scale in Scandinavia, in the three Baltic states, in Poland and even in St Petersburg (Dagens Industri´s sisterpaper Delovoi Peterburg). BSR multinational media companies already control the tv and press market of the region.

3. There are quite a few Pan-Baltic media outlets, with newsrooms regularly sharing content between countries. This applies to the news agency BNS (Baltic News Service belongs to Finnish Kauppalehti group of Alma Media) and the Estonian online media portal Delfi, both of which operates in the three Baltic states. The weekly newspaper The Baltic Times covers politics and business of the same area. In Finland, Sweden, Norway and Denmark the national news agencies extensively cross-use news content.

But the region lacks a common channel, The Baltic Channel.
In an initial phase in-depth research of potential viewers would be needed and a group of communicators should be formed, who could take the lead in developing the idea of a BSR central media channel?

The next phase would be extensive exchange of content between Public Service Broadcasters of BSR countries, also inside and between multinational media companies of the BSR. EU and national governments should subsidize such an exchange.

In this phase efforts should be made also to make existing TV-channels more easily accessible between different countries. This applies especially to the Nordic countries, where language is not a big barrier but where the idea was never realized in spite of lengthy discussions.

The final phase would see the development of a central international PSB channel/media platform of the Baltic Sea Region: tv, web, mobile. It would be unique in today’s world with an international Public Service Broadcaster, which would be based on national states stakes. In order to set up management and program structures thorough research of Euronews failures and advantages would be necessary.

The PSB channel should have a strong orientation towards business – not only for complimentary funding but getting business streams involved also into forming the channel agenda.

Not paradoxically, economic crisis serves well for exposing the need for cooperation in common marketing of BSR in global scale.

In this regard there is only joint interest, no rationale for external competition, as in global scale all of us are marginals.

1. The peoples of the BSR and of the EU.

2. Businesses, operating on BSR and Global level and needing a BSR brand.

3. BSR and EU political elite, which stands for the idea of forming a BSR identity.

That is of course if there is a political consensus not only to move in the direction of BSR identity-building, but an honest will for achieving it.

Naming of the Channel derives from the naming of the Sea.

Estonians are the only ones in the world who call it The Western Sea (Läänemeri), our Finno-Ugrian mates Finns and north-neighbours call it The Eastern Sea (Itämeri), and Scandinavians and Germans use the same name. For Russia, Latvia, Lithuania and Poland it is The Baltic Sea. For centuries it is known to the rest of the world as The Baltic (the term Mare Balticum was coined already by the Romans), including the two major languages of the EU, English and French.

We Estonians could seize the opportunity to recover the name Baltic Sea in our own language, as it was used in the first decade of the Estonian Republic, which celebrates its 90th anniversary 2008. That would encourage also other nations to use the same name under which the Sea is known to the world.

The major language of The Baltic Channel would be English. However, all participating countries (up to nine) would be able to have their voice-over option (along with linear channels also via web and mobile) in the national language. For external promotion there could be provision also for language options like Spanish, French, Arabic, Chinese etc (German and Russian would be involved already).

Competition is not only global. It is also with the Mediterranean region inside EU. If Benita Ferrero-Waldner says that `The Mediterranean was the cradle and will be the future of Europe`, the Baltic Sea Region has to take up its Hanseatic legacy, where the language was Niedersaxen only for the elite. Now the elite in BSR businesses (banks, media, shipping) has already largely shifted to English. The same language is also widely spoken in services on the ground level – you can by ice-cream in English in almost every village around The Baltic Sea.

In the BSR English more and more replaces the previous Nordic and Russian region languages. It could be seen as an advantage for regional cooperation – it will be equal for all partners around the Sea (there is no native English-speaking nation) and the language is the most used in the EU and on a Global scale.

Like former Niedersaxen or Latin, English is just a modern lingua franca, a practical tool with no deep ambitions, and perhaps not even abilities, to abolish the use or hinder the development of national languages.

Almost 1,5 million people in the three Baltic States are Russian speakers (plus Kaliningrad enclave with over half million Russian inhabitants). It is vitally important to involve them into the BSR information space, not less because PSB media in the Baltic States have failed to reach them. So far the Baltic Russians have been mostly under a Russian info-space. Originated from Moscow (Ostankino First Channel) but translated and edited from Riga to the three Baltic states PBK (First Baltic Channel) has for example from this summer in Estonia bigger share compared to PSB Estonian Television.

In these times of heightening tensions between Russia and EU there is an increasing need for building of bridges within the cultural sphere and the information space. A Baltic Channel broadcasting even in Russian would not only reach the Russians in the Baltics, but it would be possible to access even into Russia itself. This could be seen as an asset for the entire region, where the Russian minority in Eastern Baltic could become a bridge, not to say a window, to Russia. Saint Petersburg 300 years ago was built as a Russian window to Europe, and in our time it might be gaining the role of a European window to Russia.

In Helsinki Radio Sputnik operates in Russian, subsidized by the municipal administration, mostly for promotion of Russian visitors, i.e. tourists. Also Russian newspapers are published in Finland and Germany.

So the issue is not only of Estonian and Latvian interest in the BSR.

May be even more important than language is the technical platform (medium is the message). As linear TV is at its twilight, most content will be duplicated and delivered via Internet, mobile and also exposed on public screens at ports, stations and hotel lobbies and in many kinds of public transport.

The multimedia channel would make the best use of the world’s highest levels of Internet usage and skills among the peoples of the BSR. The channel would become a platform for developing cross-border e-services, which would have an impact for regional integration that could be compared only to that of a single currency.

There should be a massive development of TV-based services, starting from what reminds of text-TV and common Internet sites:
First level information services – where to go, who is who.

Second level interactive ticketing – all kinds of e-ticketing services brought together, from tickets to be printed out by customer to full e-ticketing (for example like ID-ticket in Estonia).

However a PSB-channel The Baltic Channel should publish adverts. This will add value for banks, media, transport (shipping, aviation) etc operating in the entire region and will strengthen their integrative messages.

As The Baltic Channel to a large extent will lay on non-linear TV, its advertising methods should be innovative too, mixing web, mobile, public screens and linear platforms.

Without media support cant be implemented BSR Strategy basic objectives of environment, prosperity, attractiveness, nor security. Nor internally, neither in Global scale.

„Thanks to” economy in crisis the need for joint marketing efforts of BSR externally should be recognised better. Channel would become one of few answers to the question – what can be done for expanding new markets (to make economy floating again).

Change of extent and modus of influence of US in the BSR will have impact to cooperation inside the region. Mostly in regard of Balts and Polish, but also in Scandinavian side of the Sea.

December 2, 2008 at 10:44 pm 4 comments

Die Welt – New Lithuanian PM favours cancellation of Baltic pipeline project

Flag of the Republic of LithuaniaThe German newspaper Die Welt on 24 November published an interview with the Lithuanian new Prime Minister Mr Andrius Kubilius

(Die Welt) Lithuania holds a record in the EU – in emigration. According to estimates, up to 10 per cent of the entire population are working abroad nowadays. Why?
(Kubilius) We have seen a high degree of emigration since the mid-90s. It is difficult to capture it in statistics and to explain why more people are still emigrating from Lithuania than from Estonia or Latvia. I have my own explanation: the Lithuanians are courageous people. They do not seem to mind much packing up and moving to Ireland or Great Britain. We will see what will happen now that the destination countries are suffering from a crisis.

(Die Welt) You have two grown sons. Will they also have to look for work abroad?

(Kubilius) No, they still live with us, in the “Mama Hotel,” as we say. They are working in public relations.

(Die Welt) In Latvia and in Estonia the economy has shrunk by more than 3 per cent recently. Latvia has asked the IMF for a loan. . . .

(Kubilius) We have not been hit quite so hard by the crisis. However, this is probably just a matter of time. We are all on the way into a recession. Our coalition has drawn up an anti-crisis plan. We want to reduce the budget deficit from the predicted 5 per cent to 1 per cent. We want to reduce salary payments by the state by 15 per cent. And we must also deal with social expenditures.

(Die Welt) When it joined the EU in 2004, Lithuania committed itself to closing down the Ignalina nuclear power plant by the end of 2009. Is this realistic?

(Kubilius) If the current financial crisis were joined by an energy crisis, this would be a disaster. There is a very good dialogue with the EU Commission, in which a solution is to be found – above all, an energy bridge to Sweden or Poland. I would also support a Baltic nuclear power plant, which the three states and Poland could build together. All this will become topical in 2012 or 2013 at the most. Let us be honest: at the beginning of 2010 we will have an energy gap. By the way, when we joined the EU, the EU, too, incurred obligations. We need solidarity of deeds, not just of words.

(Die Welt) Russian Prime Minister Putin has indicated that Moscow might withdraw from the project of the German-Russian Baltic Sea pipeline. What does this mean?

(Kubilius) We have been sceptical about this gas pipeline right from the start – for ecological and political reasons as well as for reasons of energy security. The costs of the construction would be very high. And there are forecasts – Russian and foreign ones – that Russia will not be able to supply the promised amounts of gas in the next decade. Russia has not invested enough in new gas fields. When Putin says Russia might withdraw, the country obviously is in a crisis itself and is coming to a more realistic position. I would be pleased about an end to the project.

(Die Welt) The only Baltic oil refinery is in Mažeikiai. Russia has ceased oil deliveries, claiming that the pipeline has been damaged.

(Kubilius) Lithuania has suggested itself to carry out repairs on Russian territory. However, I do not know whether Russia wants to see this pipeline back in operation. The closing down is a punitive political measure, because Lithuania has sold the refinery not to a Russian candidate but to the Polish Orlen Corporation. This is a mixture of politics and business. Russia is losing profits by doing this. However, the refinery is in a good situation. It buys oil on the world market and gets it delivered by tankers.

(Die Welt) Most recently, Lithuania was the only EU state that opposed a new partnership agreement between the EU and Russia – because of Georgia. What will your government do?

(Kubilius) I hope that a clearer strategic thinking will begin in Europe. Europe must understand that it has a responsibility: Russia needs help, help that prevents the country from making the same mistakes again as it made in connection with Georgia or Estonia (when moving a Soviet war memorial caused a crisis – the editor). If Europe says: these mistakes are forgotten, let’s do “business as usual,” this would have harmful effects not only on European interests but also on the development in Russia.

(Die Welt) Could the large Russian minorities in Estonia and Latvia become a problem?

(Kubilius)The rights of these minorities are at the highest European level. However, Russia’s actions in the northern Caucasus and in the Crimea show: there are attempts to use minorities for political goals. In the end, this makes the life of the minorities themselves more difficult, because political tensions develop around them.

(Die Welt) If the United States builds the missile shield in Poland, Russia intends to station new missiles in Kaliningrad. Does this frighten the Lithuanians?

(Kubilius) This would not necessarily promote security in the region. I do not understand at all how anybody can believe that the missile shield is aimed against Russia.

Source BBC Monitoring

December 1, 2008 at 12:20 am Leave a comment


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