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

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

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

Happy First Millennium – Lithuania!

In 1009 Lithuania’s name (Lituae) was first mentioned in the chronicles of ancient German town Kvedlinburg in reference to the death of missionary St. Bruno.

Lithuania on July 6 is marking its millennial Statehood Day.  This small nation, sandwiched between great Germanic and Slavic giants managed to survive against all odds in the world.  It experienced its glory days for few centuries with it medieval empire which stretched from the Baltic Sea to the Black Sea.  Some historian argue that if there was not such an empire there would not have been Belarusian and Ukrainian nations today.

It was carved up, occupied and slaughtered for few centuries to revive again and again.  It is a story of a small and great nation which held on to this piece of land next to the Baltic Sea and managed to survive.  This is why it is amazing.  Lithuania, together with its Baltic sisters managed to survive.  Despite of all difficulties at the moment we will rise like phoenix out of ashes.  Crisis are coming and going, but such nations are here to stay and prosper.

Celebratory events taking place throughout the day will be attended by Queen of Denmark Margarethe II, King Harald V of Norway, King Carl XVI Gustaf and Queen Silvia of Sweden.

Other distinguished guests will include President Olafur Ragnar of Iceland, President Valdis Zatlers of Latvia, President Lech Kaczynski of Poland, President Viktor Yushchenko of Ukraine, President Tarja Halonen of Finland, Cardinal Angelo Sodano, Legate of Pope Benedict XVI and Dean of the College of Cardinals, Prime Minister Andrus Ansip of Estonia, and Russia’s Minister of Culture Alexander Avdeyev among others.

Lithuania’s millennial celebration kicked off at noon with a Flag Hoisting Ceremony in Daukanto Square, next to the Office of President of the Republic of Lithuania Valdas Adamkus, with a Holy Mass at the Vilnius Cathedral to follow, the president’s press service said in a statement.

The Holy Mass will be followed by a symbolic ceremony marking the opening of a reconstructed Royal Palace of the Grand Duchy of Lithuania and a farewell to participants of the Millennium Song Festival “Song of the Centuries”, the statement says.

Later in the day the action will move over to the Museum of Applied Arts, where the honorable guests will visit millennial exhibitions on display, namely “Lithuania in Ancient Historical Sources”, “Wawel in Vilnius. From the Jagiellonian Dynasty to the end of the Republic, and “The Art of Balts”, and will attend lunch hosted by President Adamkus.

In the evening, guests will deliver addresses in Lithuania’s Millennial Song Contest, and later attend dinner hosted by Adamkus in the President’s Office.

Another 5,700 people join Lithuania’s jobless ranks in a week, Lithuanian unemployed ‘discover’ Scandinavia

As Lithuania’s Labour Exchange said on 22 June another 5,700 people were registered as unemployed in Lithuania last week, down 24% from 7,500 people registered a week earlier

The total number of people with the status of unemployed persons reached 196,400 as of 19 June (up from 194,900 a week earlier), which accounted for 9.2% of the working age population, as calculated by BNS.

As the BNS informs some 1,163 job vacancies were registered in 12-19 June down 19 % from 1,440 vacancies a week earlier. Some 2,600 persons got employed, down 19% from 3,200 the previous week.

There were around 1,300 vacancies in the Labour Exchange database on 19 June.

This morning Lithuania’s Public Radio announced that Lithuanians remains the immigration champions per capita in the EU.  However, destinations for new immigrants are changing.  According to this information Lithuanians starting to discover the neighbouring Scandinavian countries when looking for employment.

Nordic, Baltic PMs agree EP election results boost chances of extending Barroso’s EC presidency

Is the BNS informs on 18 June the Nordic and Baltic prime ministers agreed in Brussels that the victory of centre-right parties in the recent elections to the European Parliament (EP) boost the chances of a second tenure for European Commission President Jose Manuel Barroso.

“In these obscure times, at least something should be clear. Europe needs strong mustering leadership. Jose Manuel Barroso is perfectly suitable for the position,” Lithuania’s government cited Prime Minister Andrius Kubilius as saying.

Earlier on 18 June, Kubilius met with his Nordic and Baltic counterparts to discuss the stances taken by the countries before the start of the European Council. Heads of Finnish, Swedish, Danish, Lithuanian, Latvian and Estonian governments attended the meeting.

The prime ministers shared their evaluations of the economic situation in their countries and the region, as well as plans of overcoming the downturn, discussed the election of EC’s new president and enforcement of the Lisbon Treaty.

Latvian Prime Minister Valdis Dombrovskis presented the steps of his government to reduce the budget deficit.

According to the press release, the Nordic and Baltic prime ministers expressed support to Latvia’s difficult but necessary steps and agreed that the frequent proposals to devalue national currencies would not solve the problems but, instead, create new ones.

Source BNS

Memorandum on Baltic interconnection plan signed in Brussels

As the BNS writes the leaders of all Baltic Sea countries and European Commission President Barroso signed in Brussels on June 18 a memorandum of understanding on the Baltic Energy Market Interconnection Plan, thus marking the launch of the implementation of this action plan.

Lithuanian Deputy Energy Minister Romas Svedas, who is a member of the EU’s high-level group on developing the plan, confirmed the signing of the memorandum.

“This is an unprecedented fact in the European Union’s energy policy history: such an important document has been worked out within such a short period of time — eight months. The annexes [of the document] set out how and when a Baltic energy market will be established and integrated into the Nordic market,” he told BNS.

Svedas pointed out that the document identifies concrete projects, amounts of money and the main companies responsible for their implementation.

“This is a conceptual and phenomenal document and a good example for other EU regions, defining the energy development policy. This is a long-term document that is integrated into the period of Sweden’s presidency of the EU, which means that a focus will be given on a strategy for the whole Baltic Sea region, encompassing science, culture, energy and transport,” the official said to the BNS.

“The Baltic states, which are an energy island, must be integrated into the EU’s internal energy market and the energy island label has to be eliminated,” he said.

The European Commission’s president and the leaders of Denmark, Estonia, Finland, Germany, Lithuania, Latvia, Poland and Sweden signed the memorandum on the eve of the European Council meeting in Brussels,

The memorandum underlines the need for a further development of the electricity and gas markets in the Baltic Sea region and their integration into a wider EU energy market, as well as for promoting investments.

According to the document, the three Baltic countries aim to create a level playing field in the electricity market, open up to free international trade, and establish free competition and pricing policies.

In the gas market, their main goals are to find the cheapest solution for linking Finland and the Baltic countries to an integrated European gas network and new sources of supply, as well as to accelerate the opening of the market.

The European Union has earmarked 175 million euros for the planned power interconnection under the Baltic Sea from Sweden to Lithuania. Another 100 million euros should be provided for a second interconnection between Estonia and Finland.

The countries are to submit their joint application for the EU’s funds by Jul. 15.

Source BNS

President Valdas Adamkus congratulated King Carl XVI Gustaf of Sweden on the national holiday

President of the Republic of Lithuania Valdas Adamkus congratulated King Carl XVI Gustaf of Sweden and the people of Sweden on the occasion of the Swedish Flag Day. The President wished Sweden, on behalf of himself and all people of Lithuania, every success and long years of prosperity and well-being.

“Today’s global challenges demand that the countries of our region stand strongly united in their common work. I am delighted that the beginning of Lithuanian presidency of the Council of the Baltic Sea States coincides with the start of Sweden’s EU Presidency. I am confident that our two countries will continue their all-out efforts and close cooperation in implementing strategic projects that are important to the Nordic and Baltic states. I sincerely wish that the Baltic Sea Strategy to be launched during Swedish Presidency will bring the Baltic Rim countries together for the ultimate goal of building an ecologically clean, easily accessible, secure, and prosperous region,” President Adamkus writes in his letter of congratulations.

The President expressed hope that the upcoming visit by the King of Sweden in Vilnius to take part in the celebrations of the Millennium of the first mention of the name of Lithuania in written records would demonstrate once again the increasingly strong relations between Lithuania and Sweden and would contribute to further cooperation between people, business communities, and politicians of the two countries.

Lithuanian EnergMin wants Leo LT off power link, N-plant projects

As the BNS reported the Energy Ministry proposes that the much-criticized national energy company Leo LT should not be allowed to build either a new nuclear power plant or power links with Sweden and Poland, and that a state-owned company should take charge of the projects.

The ministry also proposes that Leo LT should not be allowed to administer EU funds.

Energy Minister Arvydas Sekmokas presented the preliminary proposal to the Cabinet on 3 June.

“A state-owned company will build both the interconnection with Sweden and a new nuclear power plant. Leo LT will not have EU funds at its disposal. Those two principles are laid down in the [ministry’s] conclusions,” Ridas Jasiulionis, the prime minister’s spokesman, told reporters after the Cabinet meeting BNS wrties.

The Cabinet is likely to discuss the proposal next week, he said.

The spokesman could not say which state-owned company would implement the projects.

The European Union has earmarked 175 million euros for the planned power interconnection under the Baltic Sea from Sweden to Lithuania, including the reinforcement of the power transmission network in western Latvia.

The countries are to submit their joint application for the EU’s funds by Jul. 15.

Additionally the BNS informed that a special-purpose governmental task group has proposed to raise the state’s interest in Lithuania’s national energy company Leo LT to at least 66 percent thus conferring more powers to the government to make decisions on the future of the company.

The government then could decide to use the assets of Leo LT for the financing of planned construction of a new nuclear power plant and power links, or to reorganize the company.

The Cabinet will consider the conclusions of the task group, a transcript of which has been obtained by BNS, as well as proposed legislative amendments, next week.

The construction of new nuclear facility and power links with Poland and Sweden is expected to be handed over to public companies, some shares of which could be assigned to the companies controlled by Estonia, Latvia and Poland.

The state’s holding in Leo LT could be raised to at least 66 percent via the issue of new shares exclusively to the government.

New shares might be paid up by property contributions, which would be determined via reappraisal of existing state’s contribution to the authorized capital of Leo LT. Estimation of value of the state’s property contribution will include Kruonis Hydro Accumulative Power Plant and the Kaunas Hydro-Electric Plant.

The state’s interest in Leo LT would have to be raised to 66 percent no later than in six months from the enforcement of relevant legislative amendments.

The government owns 61.7 percent of Leo LT, which was established last year as an investment vehicle in the planned new nuclear power plant and other multi-billion-litas energy projects. NDX Energija, a privately owned firm, holds the remaining 38.3 percent.

Lithuania’s Electric Organisation, the Leo LT is in deep trouble

Lithuania’s Electric Organisation or Leo LT is in serious trouble.  Leo LT was set up to build electricity links from Lithuania to Poland and Sweden, as well as to construct a new nuclear power plant.  The Leo LT was created by uniting the private and the state owned electricity redistribution grids.

This creation took place during the reign of the Social Democrat party and mainly preserved as a project, which benefited only the private investor and lacks transparency, especially during its creation period.  The project is discredited in the eyes of public and was called by the President-elect Grybauskaite as the paramount manifestation of the oligarchic rule in Lithuania.  The Conservative government is left with this ‘marriage’ and will have to deal with it as soon as possible.  This week saw an open admission by the PM Kubilius that the Leo LT will be dismantled.

As the BNS writes any decision on liquidation of Leo LT cannot be too hasty or irresponsible so as to prevent private shareholder Vilniaus Prekyba from making any profit on such a move, Prime Minister Andrius Kubilius believes.

Next week the government would consider the conclusions of the task group, which were submitted on 25 May, he added.

“We have accepted those conclusions and now will wait till the next week when we will consider them at the government meeting. However, if taking the breakdown way, we have to consider possible consequences, that NDX Energija, or, to be more precise, Vilniaus Prekyba may profit on such a breakdown if we act carelessly or irresponsibly,” Kubilius said in an interview to the public radio station Lietuvos Radijas (Lithuanian Radio) on 21 May.

The task group headed by Energy Minister Arvydas Sekmokas had submitted conclusions as to what measures should be avoided, he said.

As the BNS writes Sekmokas said on 18 May that the shareholder structure of Lithuania’s national energy company Leo LT, which was considered unfavourable to the government, would be reviewed in three months and proposals on further operations of Leo LT would be submitted. Simultaneously, efforts would be made to avoid any measures that could enable the small shareholder to apply to international arbitration.

Meanwhile, president-elect Dalia Grybauskaite stated that the period of three months was too long to decide the fate of Leo LT. In her opinion, “moral damage has been inflicted and decisions shall be taken faster”.  Lithuania’s president-elect Dalia Grybauskaite on 18 May said that decisions on winding up Leo LT should be accelerated.

Energy Minister Arvydas Sekmokas said on 21 May that scenarios on Leo LT fate would be submitted to the president-elect on her first working day in office (Grybauskaite will be inaugurated on 12 July).

The shareholder structure of Lithuania’s national energy company Leo LT will be reviewed in three months and proposals on further operations of Leo LT will be submitted.

Simultaneously, efforts will be made to avoid any measures that could enable the small shareholder to apply to international arbitration, Sekmokas has said.

“Leo LT has been established in a way adverse to the state, which has found itself in a rather complicated situation. No measures have been taken to prevent making unjustified profits on Leo LT operations and we will remedy this shortcoming via relevant legislative amendments,” Sekmokas told the reporters after the meeting with Prime Minister Andrius Kubilius.

Moreover, BNS reported, measures should be taken to prevent any losses of the state if the small shareholder of Leo LT opted to address arbitration, he added.

“A task group is ready to review the establishment of the company, the proportions assigned for the shareholders, that is the distribution of shares based on property contributions, whether the method of establishment was right, and it will need sufficient time to do that,” Sekmokas said.

Moreover, the task group would examine whether the establishment of the company complied with the European Union (EU) Third electricity directive, which provided for the unbundling of transmission from distribution and generation.

The breakdown of Leo LT had not been proposed in the meantime, Sekmokas said. “The continuity of Leo LT will be projected with due regard to the requirements of the third package.”

BNS noted that Prime Minister Andrius Kubilius also sounded cautious when speaking about potential breakdown of Leo LT. Property contributions of both parties would be assessed in the first place, he said.

He also noted the importance of finding an answer how Lithuania would implement the Third EU electricity directive together with Latvia and Estonia.  “When discussing the fate of Leo LT we have to know how we will implement the third package, and it would be good if we implemented it in the same way as the Latvians and the Estonians”, he said.

On the other hand the BNS writes that Lithuania’s President Valdas Adamkus maintains that the statements about plans to break up the national energy company Leo LT are political games and populism.

“Any announcements are further politicising. They are playing games now. All the elections are over but it seems to me that the populist announcements continue,” Adamkus told journalists on 21 May.

In his opinion, the country’s administration should make a clear-cut decision whether Lithuania wants to have a nuclear facility or its own or not and ensure foreign partners that the decision is in place.

“The best solution now is for the future president; the government and I present the political decision to the public and the Seimas. It is enough of the political and party games,” said the Lithuanian president whose tenure is to expire in July.

Asked whether he approved of Leo LT liquidation, he said: “No liquidation, not by any matter of means.”