Polish Infrastructure deputy minister Tadeusz Jarmuziewicz met Lithuania‘s Communication deputy minister Rimvydas Vastakas in Vilnius to sign a mutual agreement on the matter this Thursday.

“We have reached the agreement with Lithuania that we have to start the discussions,” Jarmuziewicz told PAP.

According to Lithuania‘s Transport and Communications Ministry, the two countries will cooperate on accomplishing a study on the possibility to create an air space block . The European Commission is going to finance the study partially.

“This project is a big challenge to the engineers. We hope to finish it by 2012,” Jarmuzievicz said.

He stated that other Baltic countries, Latvia and Estonia, could also join the block later.

The EU members are trying to establish common air zones by mid-2012 in order to manage the air space more efficiently and safely. This initiative gained speed after the Iceland‘s volcano eruption this spring, when Europe‘s air traffic was badly disturbed.

People who visit their holiday destinations in summer often have to pay hefty fees to take their cars across the water to the spit, while residents pay less tariffs. Locals also do not pay to go onto the spit with their car.

People approach local residents and ask them if they can register their address under the property.

Neringa Mayor Vigantas Giedraitis also said that many people were buying fuel over the Russian border, because it was less crowded than other checkpoints. Many petrol smugglers drive across the border then bring back cheap petrol, which is sold illegally to Lithuanians.

The mayor has called on locals not to allow others to register at their homes, but often they profit from the act.

“The Neringa population do not think that in doing so they harm the state and themselves. Not just an artificially large load for ferries and border posts, but they do damage to the municipality, which collects more local charges for the entrance to the spit,” the mayor said.

PM Kubilius, who is on his bicycling holiday in Belarus said to Ziniu radijas on 29 June that since the gas consumption in the both countries is different the initial construction of the Lithuanian and Belarusian LNG’s should proceed separately.  Lithuania is planning to build an LNG terminal with capacity for 3 billion cubic meters a year.  The Byelorussians need an LNG terminal with capacity of 8 to 10 billion cubic meters a year.  The both countries consume according amounts of gas annually.

Prime Minister Kubilius has also stated that in the near future a first shipment of the Venezuelan oil for Belarus could be handled at Lithuania’s Klaipedos Nafta (Klaipeda Oil).  He said to Ziniu radijas, ‘Talks are underway to use the Klaipedos Nafta terminal’s capacities. There is a possibility that the first such oil shipment will reach Belarus via Klaipedos Nafta in the near future. The whole technological line will be tested whether it is worthwhile.’

In May media reported that an additional works would have to be done in order to be able to handle the Venezuelan crude oil shipments for Belarus.  It was reported that while the Lithuanians were calculating the cost of such adjustment Minsk began considering to choose Tallinn over Klaipeda.

The political era of Algirdas Brazauskas has ended. By all rights it began in 1988, on June 24^th of that year in Vilnius,  Sąjūdis organized a farewell gathering for the delegates to the 19^th All-Union Conference of the Communist Party of the Soviet Union being held in Moscow. At that point, A.Brazauskas was only one of the Lithuanian Communist Party’s secretaries, yet he was the only government representative brave enough to take the podium and address the gathering of people. Four months later, after pressure from Sąjūdis, the leadership of the Lithuanian Communist Party changed – A.Brazauskas was elected First Secretary and he became the first Lithuanian leader born from “his” Lithuania.

In March 1990 A.Brazauskas was elected to the Supreme Council – Restoration Seimas, and became a signatory of the March 11^th Act of Restoration of the Republic. From that time, he served in the highest ranking national offices for at least some period – 1990-1991, First Vice Premier of the Government, 1992 – Seimas Chairman and Acting President, 1993-1998 – President, 2001-2006 – Prime Minister. In eleven of the first sixteen years of restored independence of the Republic, A.Brazauskas was one of its most influential political leaders. Few would point in error calling the period of restored independence, using old soviet naming conventions, as A.Brazauskas’ political epoch. Upon his leaving political life, the Lithuanian Republic steps into a new phase of its development.

Politicians, particularly a well known and influential politician, can leave their posts via a choice of two paths. First – leave without losing to ones opponents, being at the height of power, making up your own mind when to take that step. Second – to leave ones post under intense pressure understanding that if you don’t make the choice to step down, you will be forcibly removed. A.Brazauskas experienced going down both of these paths.

The first time A.Brazauskas gave notice of his departure from national politics, then President A.Brazauskas announced in the fall of 1997 that he would not seek election to a second term (where victory in that election was all but guaranteed for him, at least that is the current belief). He announced that it was time for a new generation to take command of the nation, unburdened by the soviet past. A.Brazauskas named his successor – former Prosecutor General Artūras Paulauskas.  The latter, even with the support of A.Brazauskas, lost the Presidential elections to Valdas Adamkus.  This, of course, somewhat tarnished the elegant exit of A.Brazauskas, which people manage to forget.

In the summer of 2001, after the collapse of the “new political” coalition, A.Brazauskas returned triumphant. In the previous year, the Social Democrat and LDDP coalition, which he led, received the most votes in the Seimas elections and he himself proclaimed he is returning to “save Lithuania”. It is true that the economy was reformed and was climbing out of the 1998-1999 crisis, although the majority of the population had yet to experience any positive results. The return of A.Brazauskas was generally regarded in a positive way in that most believed he was no fan of political infighting and that his presence would stabilize the scandal ravaged Lithuanian political environment.

In 2001 a new A.Brazauskas returned to government – one who was convinced of the righteousness of his own decision making, ignored public opinion, unafraid of scandals which would just slide off of him as easily as water from a goose’s back. A time when he felt great nostalgia for his, and his soviet, past. His term as Prime Minister began with a scandal marred trip to Moscow with business leader Bronislavas Lubys to meet with Russian energy representatives and a hunting trip with his close family friend – Manager of LUKOIL Baltia Ivan Paleicik. Next, he surprised foreign investors when he organized a speech pointing out how the soviet period was positive for Lithuania.

That by all definitions hot summer of 2001 did not cloud suspicions as to why A.Brazauskas took efforts to return to government leadership. Looking back today, the almost prescient words of philosopher Vytautas Radžvilas in Veidas: “The primary motivation that leads him back into government is that during the entire independence restoration time period, he faithfully represented that which I refer to as the soviet Lithuanian elite. These elites are fighting for their rights – to control the nations’ wealth and to maintain decision making influence. And those groups that are trying to take the last remaining tidbits of privatized national capital away are again trying to force him out.  I can’t discount the possibility that this happened against his will. He returned to finish his last task – to determine who would benefit from the privatization of Lithuania’s energy sector. And those people who assigned him this task, in considering A.Brazauskas’ possible future positions – didn’t care. He would be “eaten up” as a politician.”

In fact – the growing national economy and the post EU accession’s arrival of EU Structural funds presented a unique opportunity to the A.Brazauskas Government to finally reform social, health and higher education systems, yet nothing was done. They couldn’t even manage to introduce the promised Euro currency. That’s why the government sold off “Vilniaus Prekyba” to western concerns and Lietuvos Dujas (Lithuanian Gas) to GAZPROM and a German consortium (although they saved the go between Dujotekana which is of dubious value). Then A.Brazauskas stumbled upon Mažeikių Nafta.

The root causes of Brazauskas’ second forced withdrawal from politics can be found in the summer of 2005, with the commencement of the competitive sale of shares in Mažeikių Nafta.  At the time, when the leaders of the worlds’ largest natural gas concerns traveled to Vilnius, A.Brazauskas didn’t hide his sympathies toward Russian representatives – primarily LUKOil and GAZPROM. September brought the first significant political scandal since A.Brazauskas’ first arrival in government. He was reminded of the historical details involving the privatization of the Draugyste hotel restaurant Šešupė along with his and his wifes, Kristina Butrimiene, ties with LUKOil-Baltia manager I.Paleicik. He was also reminded of the bankruptcy of EBSW and its managements’ ties to those around A.Brazauskas. Significantly, this is the first time in 20 years that scandals started to “stick” to A.Brazauskas. His popularity dramatically declined as it appeared that the public was demanding that, on the whole, he was responsible for his Government. At the end of November 2005, A.Brazauskas found himself at the threshold of resignation. 

However, the ruling coalition managed to hold on at the time. It appeared that A.Brazauskas, and increasingly influential leader of the Darbo (Labor) Party Viktoras Uspackichas agreed on the terms of purchase for the shares in Mažeikių Nafta. The game, though, was ruined by the Russian concern Jukos, which announced that the shares of Mažeikių Nafta that it holds will only be sold to the highest bidder. The Polish concern PKN Orlen became the frontrunner, after a change in leadership it also acquired the support of the Polish national leadership. A.Brazauskas’ plan – for the government to purchase the shares held by Yukos and to sell Mažeikių Nafta to his designate, collapsed.

A.Brazauskas’ Government’s decline into agony began in April 2006 with V.Uspackich’s successful interpellation against Seimas Chairman A.Paulauskas. Understanding that he could be next, A.Brazauskas unsuccessfully tried to convince his party’s representatives to support A.Paulauskas – regardless it was too late. He did manage to resist V.Uspackich’s post interpellation grab at control of the Government, but the coalition’s disintegration could not be stopped. In May, the State Security Department and the Prosecutors Office raided the offices of the Darbo (Labor) Party and accused it of improper campaign financing activities – V.Uspackich fled to Russia.

On May 30^th, President V.Adamkus offered that A.Brazauskas should refute the public’s uncertainty in his Government and to follow the Constitutionally defined methods to form a new Government and receive a vote of confidence from the Seimas. The next morning, the Darbo (Labor) Party’s Ministers resigned from the Government and A.Brazauskas left to meet with the President where he offered the President his resignation.

Formally, no one overtly asked that A.Brazauskas resign. Had he received a vote of confidence from the Seimas, his Government would have been able to continue to work. However, A.Brazauskas didn’t have enough votes for the vote of confidence and he would have had to look for support from the Conservatives – with which A.Brazauskas could not find any points of common ground. Had A.Brazauskas tried to put aside his ambitions and in looking for support, taken the required steps to negotiate with Conservative leader Andrius Kubilius, who well remembered the previous years privatization efforts at “Draugyste”, A.Brazauskas would not have been able to maintain his nomination. For this reason he chose to resign – by his own choice, but in reality he was forced out by the events. His chosen successor as Prime Minister, Zigmantas Balčytis, as with A.Paulauskas before him, failed to receive the confidence of the Seimas.

The head of Government was taken up by Gediminas Kirkilas, a representative of the younger generation, who was nominated to the post by the independence era formed political elite which now formalized its victory over the old “Brazauskas” political elite.

The true extent and breadth of ones political personality only becomes clear once one leaves high office. A.Brazauskas’ influence in government remained significant even after he stopped participating in active politics. His words were seriously regarded not only by fellow Party members, but also by the business world, diplomats and the public at large.

Of course, over time even the most powerful leaders lose influence. This last year was particularly difficult for him as the new Government not only significantly cut the budget of his personal project  Valdovų Rūmai (Royal Palace) but also saw his chosen successor not approved for Party leadership. In looking back, the usurper of his position as Chairman of the Social Democrats, G.Kirkilas, lost his post in a shameful way – even A.Brazauskas’ now long time protégé Zigmantas Balčytis recognized the advantages behind non Soviet Party elite associated Algirdas Butkevičius.

Time will tell. But even from within the current generation, a universally recognized leader like A.Brazauskas isn’t readily apparent.

In analyzing his work, the proponents of A.Brazauskas will point out that during his leadership Lithuania established friendly relations with its neighbors, created strategic partnerships with Poland, implemented the Litas currency, became a candidate and then full member of NATO and the European Union and experienced unforeseen levels of economic growth. Opponents will recall that each forward step taken only happened with pressure from behind, no systematic reforms were created via his initiative yet he became the “shining star” and partook in the fruits of other peoples labors. Both versions will be true.

Translated by VG

In II quarter 2010 positive changes in the value added created by industrial and services enterprises compensated for the decrease in the added value in the construction sector. The increase in the value added generated by transport, industrial and wholesale enterprises determined positive changes in GDP.

In I quarter 2010, GDP amounted to LTL 44814.3 million, i.e. by 0.9 per cent less than in I quarter 2009 (the changes have been estimated using a chain-linked volume of added value).

Fig. 1. Changes in gross domestic product, as compared to the corresponding period of the previous year 

^♦ Changes in gross domestic product, first estimate.

Fig. 2. Changes in gross domestic product

In II quarter 2010, GDP per capita amounted to LTL 7310.3 at current prices, i.e. by 1.6 per cent more than in the same quarter in 2009 (price change adjusted).

In II quarter 2010, compared to II quarter 2009, seasonally and working day adjusted GDP increased by 1.1 per cent, as compared to I quarter – by 2.9 per cent (see Fig. 2).

Revised I quarter 2010 gross domestic product

Statistics Lithuania, based on more detailed quarterly data and having estimated the added value under a more detailed list of economic activities, has revised the second GDP estimate for I quarter 2010. According to the revised data, in I quarter, GDP amounted to LTL 20527.8 million at current prices and, against I quarter 2009, decreased by 2.8 per cent (the previously announced second GDP estimate amounted to LTL 20863.1 million and also dropped by 2.8 per cent).

The revised data are announced in the pre-defined tables and in the Database of Indicators on the website of Statistics Lithuania.

Gross domestic product estimates

^◘ Provisional data.
^♦ First estimate.

Do you regret that a year ago you supported Grybauskaite’s candidacy during the presidential election?

Not at all. We work with the president closely. I can tell you that over the year Grybauskaite was able to reveal herself well. I think Lithuania is lucky to have such a president.

Do you feel the president’s support for yourself and the cabinet?According to the Constitution, we are independent institutions, and we do not necessarily have to have a united opinion on every issue. We hold discussions; sometimes we see certain things differently. Yet, in my opinion, we have the same opinion on vitally important issues.

What complaints do you hear, when you meet with the president?We definitely did not have any illusions that the president’s role during this year would be only to praise us: Look how well the government is working!Hurray! Applause! We ourselves see things were work is needed, where it is necessary to concentrate our strengths. For example, the fight against corruption, smuggling, and the shadow economy.

Yes, we are criticized and disciplined, but we still try to achieve tasks after listening to the criticism and proposals and after discussing them.

In the beginning of the term in office it seemed like the relations between the president and the cabinet were almost ideal. Later, we started seeing disagreements. Are things only getting worse with time?

I cannot say that we have a critical mass of issues on which there are big disagreements. Maybe there are different positions on some of the questions.

For example, regarding land. In my opinion, strengthening the self-government is a priority. It is impossible to strengthen them without giving them more power and responsibility. This is how we saw the issue of land. May be we did not coordinate this issue with the President’ Office fully, and the president’s proposal was adopted.

Talking about appointments to posts in the law enforcement, I can say that the government does not have some sort of special powers. I would like to wish success to the new prosecutor general in reforming the office and in improving its prestige.

When it comes to selecting candidates for the posts in various law enforcement institutions, however, our knowledge about proposed candidates is pretty limited. In this situation I said we knew nothing about the candidate for the prosecutor general’s post. The conversation with him in the parliamentary group was very brief.

In such a situation it is very hard to accept responsibility for appointing someone to such a post.

Once you said: “Not only the government, but also the Seimas and the president should be responsible for the finance policy. Was this a complaint against the president for avoiding responsibility for the finances and for blaming everything on the government?

No. I do not want to create an impression that there are some sort of major disagreements. During discussions in the Seimas sometimes we would like to see understanding why the government presents this or that decision in the area of finances. The amount of understanding, however, is increasing, even among some of the opposition members.

Even though we discuss this or that tax or financial issue with Grybauskaite, as an experienced economist, in the end we come up with common decisions.

Do you already have the president’s support for the future decisions regarding tax hikes in autumn?

We are not planning this. Therefore, there is no need to gain support.

Does this mean that you can guarantee that in the fall there will not be tax hikes?We are definitely not planning this at this time. We will see how things are, when it is time to form the budget.I can only assure you that Lithuania will not be pushed into debt up to its neck. To achieve this, we must reduce the deficit. This is our main goal. The president understands this very well and she often has said that for a few years there will not be any opportunities to be generous with our spending.

Your answer “we are not planning this at this time” is confusing. The period “at this time” can end tomorrow. Can you say clearly whether taxes will be increased?

The next question is how to achieve the goals related to the deficit reduction. Can we continue reducing spending, or should we look for additional income, or should we try to regain more revenue from the shadow economy.

We are discussing all those issues; sometimes our discussions are too open. We are looking for solutions, and the year and a half of our work in the coalition shows that we are capable of finding them.

Do your hear complaints from the president because of improperly implemented reform of the Government’s Chancellery and leadership of ministries and because of weak office of the Prime Minister’s Chancellery?

Well, we have different views. I, for example, do not know and do not assess the chancellors of other institutions that I do not know. I know the Seimas Chancellor. I think it was no accident that in one survey he was voted number one in terms of professionalism. I also value my chancellor – Deividas Matulionis, who was third in the same survey.

I understand that the bread and butter of journalists is to look for disagreements, biggest conflicts and accusations.

Just do not tell me that your relations with the president are ideal…I only want to remind you that the media constantly escalates certain things, for example, that Kubilius’s is in conflict with Vytautas Landsbergis. This has been continuing for over ten years. I have already gotten used to the apocalyptic visions related to the alleged disagreements between myself and Landsbergis.Yes, we know what foreign policy we are implementing.Compared with the past, I see certain natural changes in his area. I think there are fewer declarative-style positions and more consistent work. The most important goal in the foreign policy is to ensure Lithuania’s geopolitical security. This will be greatly influenced by the future perspective in the region between our country and Russia. I see potential for that region to gravitate closer towards Europe.

The president is responsible for setting the foreign policy directions and is responsible for implementing the foreign policy together with the government. Do you know what our foreign policy is?

What about the fact that we are turning away from the United States, as our biggest ally?

Over the past six months I visited the United States twice. I met with President Barack Obama and State Secretary Hillary Clinton. I do not see here any turning-way. I see a changed US policy towards Russia and our region. What this means we can see from positive things. Yet, we must monitor the situation closely and analyse it.

Will the president’s support for the government last at least until the end of the term of this Seimas?

I do not know whether the issue of support needs to be raised. Here is the essence: Do we agree on essential political issues? I see such a consensus.

The fact that sometimes we are unable to convince the public is our mistake and unfinished work.

How can you explain this paradox – the president, who supports you is the most popular among the public, while your ratings are the lowest?

Perhaps it is for the best that this is how we divide things… (Laughs!)

A government that comes to work during such a difficult time must choose whether to worry about its popularity or whether to concentrate on the works it must implement quickly and effectively. In this case, popularity plays a secondary role.

Of course, one always wants to see more understanding and appreciation from the public. In the end, however, you ask yourself whether you are really doing what you are supposed to be doing, and you go do what you have to do.

“I am pleased with the results of the ongoing economic recovery, proving that we are on the right track, and that the Lithuanian economy is climbing out of the recession, and, finally, that our economic stimulus plan is working. It will certainly require our further steadfast efforts and time to tame current unemployment and budget deficit. Then, the bare statistic figures of growth will translate into palpable results for the population.”- said Prime Minister Andrius Kubilius.

According to the Prime Minister, unemployment, the lowest as it is among the Baltic states, still lingers high, and the Government is determined to continue promoting creation of new jobs, foreign investment and reducing red tape for business.

With reference to the above statistics, Advisor to the Prime Minister Mykolas Majauskas has pointed out that despite the economic recovery, the budget deficit remains very high and one of the largest in the EU, thus calling for further consolidation of public finances next year through a reform of state property management, which has revealed significant negligence; through fight against smuggling; and energetic efforts to boost small and medium-sized businesses.

Statistics Lithuania Wednesday published figures that show a 1.1 percent year-on-year growth in gross domestic product for the second quarter. A 6.6 percent increase in GDP was also recorded against the first quarter of the year.

Though there was growth annually and on a quarterly basis, the economy in the first half of the year is still 0.9 percent slower than in 2009.

There was a minor revision to the first quarter GDP figures by the statistics department, but the base percentage remains at 2.8 percent quarterly growth.

Most analysts expect there to be annual growth this year, meaning that the second half of the year should be better for industry.

Domestic demand, particularly in retail, has been extremely low since late 2008 and continues to move slowly. Industrial orders have however picked up recently as other countries begin to recover and order Lithuanian goods.

Faster growth is expected in 2011.

Lithuania still remains at the top of broadband development in the world, Strategy Analytics stated in a press release. Only South Korea, Hong Kong and the Netherlands achieved better results than Lithuania, which scored 7.52 points. Japan ranked fifth, scoring 7.42 points.

According to the press release, five factors (speed, affordability, value for money, household penetration and urbanicity) were taken into consideration.

Lithuania also has the highest mobile phone penetration rate in the EU, which stands at 147.3%.

Industrial production rose 4.8 percent year-on-year in June, faster still than the 3.2 percent growth seen in May, Statistics Lithuania reported in a press release.

Compared against May in monthly figures, industrial output in June grew by 5.9 percent.

During the month the country’s struggling manufacturing sector saw output grow 6.2 percent, while mining and quarrying output fell 2.1 percent.

Excluding refined petroleum products, manufacturing, one of the largest employers of all sectors in the country, grew by 8.9 percent in June. Production of electricity, gas, steam and airconditioning fell by 8.5 percent.

Production of intermediate and consumer durable goods increased during the month.