For the first time since the restoration of the independent state of Lithuania, the start of underlying reforms in the energy sector failed to topple down the Government. Of course, Andrius Kubilius was just one step away from surrender, the political earthquake hit and the Government tottered but it withstood the test. It might be that the underground shocks will be felt for some time but one thing is obvious: barely several months until the planned nuclear power plant construction concession agreement is signed in June, the incumbent Government is the same one that started the energy market reshuffle three-and-a-half years ago. This is something new in Lithuania since it reflects the country’s transition to the next quality level as a state, Audrius Bačiulis writes in veidas.lt on 27 March.
All the politicians and energy sector officials are clearly aware of the rule that was around for two decades: any Cabinet that resolves to start energy reform by reducing dependence on Russia is doomed. The first Gediminas Vagnorius-led Government experienced it in 1992 as it collapsed soon after the search for the future Būtingė oil terminal construction location began. Adolfas Šleževičius’ Government came next in 1996: it crumbled amid the bank crisis that followed the Prime Minister’s statement about the strategic plans of declining the sale of Mažeikių Nafta to LUKoil and, instead, merging the pipeline, the refinery, and the terminal into a single company.
In 1999, the second Gediminas Vagnorius’ Government tumbled when officials started seriously searching for a Mažeikių Nafta buyer in the West. The first Rolandas Paksas’ Government went down the same path when just a few days until the signing of the agreement with Williams International, the Prime Minister resolved to step down in an attempt to ruin the deal. The second Government led by Rolandas Paksas was overthrown after the agreement on the Lietuvos Dujos privatisation plan.
With the Government reins in his hands, the incoming Prime Minister Algirdas Brazauskas, accompanied by Bronislovas Lubys, flew to Moscow to discuss gas issues and, a while after that, Lietuvos Dujos’ privatisation plan, which had already been approved by the World Bank and the Parliament, was revised to suit Gazprom’s interests.
The Parliament corruption scandal, which happened just a few months before the parliamentary elections of 2004 and cast a dark shadow on all of the parliamentary parties, thereby leading to barely bringing Viktor Uspaskich in as the new Prime Minister, erupted soon after the Parliament tried restricting the profit that Gazprom intermediaries were making. The Government of Algirdas Brazauskas himself caved in when Mažeikių Nafta was acquired by not some Russian, but rather a Polish company Orlen, and then the turn came for the privatisation of Lietuvos Dujos. One of the contributing factors in the complete destruction of Gediminas Kirkilas’ Government in the parliamentary elections of 2008 was that it had become an obvious marionette of Vilniaus Prekyba in designing LEO LT.
Attempts to continue the tradition of “Governments succumbing to an energy reshuffle” were evident last year, too. In the light of previous developments, it is hard to believe that there were no links between the unexpected South Korean KEPCO withdrawal from the nuclear power plant construction tender and the immediately-following scandal over the removal of Economy Minister Dainius Kreivys, as initiated by the President, which could have led to the collapse of the Government. Even the more so that the artificially-fomented scenario of the expulsion scandal and the current Financial Crime Investigation Service (FCIS) leadership scandal, leading directly to the Government crisis, are so alike, that it makes one believe they were both schemed by the same person.
This time, however, the scenario fell through. Twenty-two years of being an independent state did not go to waste. First of all, the society today is much more mature, and it is better-informed and organised due to the Internet and social networks. The media-instigated information bubbles explode in their primary stage, spattering the blowers themselves.
Second, politicians themselves have also matured and gained experience. Prime Minister Andrius Kubilius has witnessed all the previous “energy crises” and was directly involved in them: in 1999, he helped eliminate the consequences caused by the disintegration of Gediminas Vagnorius and Rolandas Paksas’ Government while, in 2005, he took part in stirring the breakup of Algirdas Brazauskas’ Government. Hence, now he is very well aware of all the backstage players and their methods, since there were basically no changes in either during the past few years.
What is the significance of all this to Lithuania, as a state? The surrounding world, keeping us under a magnifying glass, was sent a strong message: Lithuania is ruled by a Government, not some grey cardinals and energy men paying their bills. This means that Lithuania is now different and, correspondingly, the attitude towards it must be different. In 1998-1999, for instance, no one was willing to participate in the sale of Mažeikių Nafta because none of the serious oil market players could believe that without the permission from Russia, the weak Lithuanian Government was able to sell the refinery that de facto belonged to LUKoil.
No Western investors were in sight during the sale of Lietuvos Dujos either. All the gas market players were aware of the fact that, without Gazprom’s blessing, such a sale was not possible.
It might be that the meeting between the Lithuanian, Latvian, and Estonian prime ministers two weeks ago in Prienai, initially intended to put the final touches on the shareholders’ agreement, ended with a political declaration only because the neighbours were not sure if they were negotiating with the Government head or not. After all, long-term multi-billion contracts are not concluded with doomed prime ministers. Now, the VNPP investors know that the Government rules.
The surrounding world, keeping us under a magnifying glass, was sent a strong message: Lithuania is ruled by a Government, not some grey cardinals and energy men paying their bills.
Translated by Nordtext –
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