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Vol 2, No 18
9 May 2000
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Lithuanian News Review News from Lithuania
All the important news
since 29 April 2000

Mel Huang

Politics and foreign affairs

The campaign season unofficially began for the autumn general elections, as President Valdas Adamkus announced 8 October as the date of the Parliamentary elections. This angered the ruling Conservatives, who wanted to push it back to the end of the four-Sunday window. However, Adamkus appeared wanting to get the event over with, as many of the 71 first-past-the-post districts will likely require a second round - which could be held in late October, if the first round is held that early. Adamkus did not choose 1 October probably because of the Olympics.

This comes as two left-wing parties, the Social Democrats and the Lithuanian Democratic Labour Party (LDDP), announced they will run in the elections as a coalition. The consolidation of the left, however, was not complete. The two said a merger is still not being discussed, and the self-professed centre-left New Alliance (Social Liberals) of Artūras Paulauskas is shying away from the pack.

This comes even with the urging of ex-President Algirdas Brazauskas, who has called on leftist forces to unite for the coming elections. It has become a "will he or won't he" situation, as many rumours on his political comeback float in and out of the press.

The Seimas passed a procedural law on the partial shutdown of the Ignalina Nuclear Power Plant. The law stipulates that the process must be complete by 2005. Opposition to the law complained that even if funding does not come through, it could be binding. A donors' conference is scheduled for the summer. In related news, the second unit of Ignalina came online, as the first unit went offline for several months of maintenance.

Croatian Foreign Minister Tonino Picula made a visit to Lithuania to promote bilateral ties. Tonino Picula met with President Valdas Adamkus, Foreign Minister Algirdas Saudargas and other officials.

Lithuania now has three Christian democratic parties, as the Modern Christian Democratic Union was founded. This breakaway group of the main party, which includes several MPs, also had to fend off accusations of being linked to a cult by its political enemies. The third party of the persuasion, the Christian Democratic Union of MP Kazys Bobelis, is in a strong position, in a coalition with some unsavoury forces for the October elections.

The Seimas passed a law regulating the internal Special Investigation Service (STT). Previously the investigating agency fell under other legislation.

Prime Minister Andrius Kubilius, Economics Minister Valentinas Milaknis and central bank head Reinoldijus Šarkinas travelled to Berlin to promote investments in Lithuania.

The government decided to merge the Interior Ministry and the Public Administration and Municipalities Ministry into one, possibly by next year. No name has been proposed yet for the merged entity.


Economics and business

After five quarters of decline, Lithuania finally registered a good quarter. The Statistics Department announced Q1 GDP growth at 4.2 per cent, compared to the same period in 1999. However, this is not much to celebrate, since in Q1 1999 the decline was 5.7 per cent. But is this a sign of the economy rebounding?

Unemployment also dropped by a fractional 0.2 per cent, down to 11.2 per cent nationwide. The highest regional rates are in Pasvalys (20.1 per cent), Druskininkai (19.9 per cent) and Akmenė (19.7 per cent). The highest urban unemployment comes in fourth city Šiauliai (16.1 per cent) and fifth city Panevėžys (14.5 per cent).

The government approved the public offering of the remaining government-held stake in Lietuvos Telekomas (Lithuanian Telecom). The sell-off of the 35 per cent stake will take place in Vilnius, Riga, Tallinn, and London and should generate much more than the LTL (Lithuanian Litas) one per share face value of the 28.8 million shares for sale. Currently, about 60 per cent of the company is owned by telecom giants Sonera of Finland and Telia of Sweden, and five per cent is owned by company employees.

A survey by the Financial Times showed that the largest company in the Baltics by market capitalisation is Estonia's Eesti Telekom (Estonian Telecom), at USD 1.12 billion, but it's only the 23rd largest in Central and East Europe. Russia's LUKOil was, naturally, first at USD 9.6 billion. Lithuania's Lietuvos Energija (Lithuanian Energy) came in 64th, at USD 230.5 million and Mažeikių Nafta (Mažeikiai Oil) at 84th at USD 123.9 million.

The heads of the stock exchanges of Tallinn, Riga and Vilnius signed a letter of intent of their move towards the pan-Nordic NOREX. NOREX, which currently links the exchanges in Stockholm and Copenhagen, has similar letters of intent from the exchanges in Reykjavik and Oslo. The three Baltic bourses see membership as the ultimate goal.

Blaming it on "technical faults" on the Russian side, crude oil delivery to the oil refinery at Mažeikiai has stopped once again. The refinery has been idle since Sunday 30 April 2000.

Two banks, Nordic giant MeritaNordbanken and Germany's Vereins- und Westbank, received approval to start work this past week.

Is Cuba planning a payback by blocking Lithuania's entry into the World Trade Organization (WTO)? Deputy Foreign Minister Algimantas Rimkūnas said that Cuba, a WTO member, has unexpectedly asked to start trade talks, launching fears that they want unrestricted access for their sugar. Lithuania has a large sugar surplus itself. The speculation is that Cuba is paying back Lithuania for supporting its vote on a US-sponsored UN resolution on Cuba's human rights situation, which failed. Ironically, it appears also that the US is among nations complaining about Lithuania's subsidy and agriculture support policies, which is the real impediment to its WTO entry.


Social and local interest

As of 1 May, the social insurance fund SoDra is in debt by LTL 165.8 million. The fund is still dependent on bank loans and government guarantees to ensure payments are possible. This current financial crunch is blamed on a rash of recent bankruptcies.

A Vilnius district court turned down the appeal to commute the sentence of reputed mob boss Henrikas Daktaras. Daktaras, who also won attention after the European Court of Human Rights decided to look further into his case, will have to serve his entire 7.5 year sentence for various crimes such as extortion.


And in other news...

The right-wing daily Lietuvos Aidas appears to be in serious trouble, with debts ahead of assets, and some are pushing for its bankruptcy. However, the majority owner and the leader of the scanty Reform Party, Algirdas Pilvelis, is fighting attempts to bring the ailing paper to insolvency.

Disgraced MP Audrius Butkevičius apparently made remarks about his own arrest and jailing, during a meeting of a group of international parliamentarians in Amman. Butkevičius, who served several years of a prison sentence for graft, remains defiant of his conviction and has attributed it to political reasons.

Is there a Lithuanian clone to the "ILOVEYOU" virus? Reuters reported that there's a version going around with the line: "Susitikim shi vakara kavos puodukui..." (Let's meet this evening for a cup of coffee...)

Exchange rates
As of 5 May 2000

currency Lithuanian
litas (LTL)
1 US dollar 4.00
1 British pound 6.15
1 German mark 1.83
1 euro 3.58

Mel Huang, 5 May 2000

Moving on:


Baltic News Service (BNS)
The Baltic Times
Radio Free Europe/Radio Liberty
Reuters news on Yahoo

Lietuvos Rytas
Lietuvos Aidas
Kauno Diena


EU Focus:
Mel Huang
Between Helsinki and a Hard Place

Gusztáv Kosztolányi
Hungary Playing Hard to Get

Brian J Požun
Slovenia's Cities

Jens Boysen
German Hegemony

Rafał Riedel
Poland on Course

Robin Sheeran
Slovak Catch-up

Catherine Lovatt
Romanian Road to Reform

Jan Čulík
Anarchists on Parade

Gusztáv Kosztolányi
Hungarian Censorship

Oliver Craske
Britain Looks East

Andrew James Horton
Director Aleksei Balabanov

Elke de Wit
Football Flick

Wojtek Kość
Polish Sensation

Culture Calendar:

Sam Vaknin
Balkan Terrorists

Mel Huang
PR and Extremism

Czech Republic