Mel Huang

New Prime Minister Andrius Kubilius announced his cabinet early in the week. All the ministers from the cabinet led by ex-Prime Minister Rolandas Paksas will remain, except for the economics and finance ministers. Replacing Jonas Lionginas as finance minister is Vytautas Dudenas, an MBA graduate from the University of Chicago and the chairman of the Seimas Foreign Affairs Committee. Former economics minister Eugenijus Maldeikis will be replaced by the head of computing firm Alna, Valentinas Milaknis.

But by keeping his job as justice minister, Gintaras Balciunas was forced to suspend his membership in the Centre Union. The Centre Union demonstratively went into full opposition after the government approved the agreements with US-based Williams International to sell a majority stake in the country's oil industry. The party leadership told Balciunas to leave the cabinet or the party, but Balciunas took the middle road by suspending his membership for the time being. Party leader Romualdas Ozolas already resigned from his post as Deputy Speaker of the Seimas.

With the resignation of Ozolas and the promotion of Kubilius to prime minister, the presidium of the Seimas was short two deputy speakers. Thus, the Seimas voted to name two new deputy speakers - Rasa Jukneviciene of the Conservative Party and Rimantas Dagys of the opposition Social Democrats. The acceptance of the job by Dagys has touched off a row among Social Democrats, as the old division between moderates and radicals reappears. Dagys sits on the moderate "Social Democracy 2000" wing of the party - which opposes the radical wing of current party leader Vytenis Andriukaitis.

In the mean time, the programme of the new government led by Prime Minister Kubilius was passed by the Seimas by a 76 to 33 margin. The foreign policy goals of EU and NATO membership remain, while domestic policy will focus on corruption, crime, investments and a balanced budget. Kubilius also delayed the controversial deposit compensation scheme, which compensates for lost ruble deposits. This was one of the major parts of the Conservative Party's platform during the last general elections. The cabinet took their oath of office after the vote.

The Seimas did rule that the petition for a referendum on the aforementioned oil deal with Williams International is void. This came as opposition MP Saulius Peceliunas took his name off the petition at the last moment, leaving the sheet one signature short of the needed 48. Despite three other MPs signing the petition later, the Parliament's Ethics and Rules Committee ruled that it was void and any petition must be started anew.

On the tenth year anniversary of the fall of the Berlin Wall, Finnish President Martti Ahtisaari hosted four of his colleagues - presidents Lennart Meri (Estonia), Vaira Vike-Freiberga (Latvia), Valdas Adamkus (Lithuania), and Aleksander Kwasniewski (Poland) - in the university town of Jyvaskyla for commemorations (see this week's Amber Coast for a related story). All the leaders remembered fondly the watershed event, but warned against a future Cold War and possible new divisions in Europe.

Prime ministers from the Nordic and Baltic countries gathered in Stockholm for a one-day meeting of the "5+3" group. The focus of the meeting was EU enlargement and bilateral co-operation. The group, which is comprised of Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden, expressed satisfaction at the recommendations of the European Commission to start membership talks with all prospective members. The next annual meeting will be held in the Estonian resort city of Parnu.

With his dramatic resignation from the prime minister post, Rolandas Paksas pulled ahead of all competition and now holds an incredible 86 per cent support rating, according to a poll done by the Baltijos Tyrimai/Gallop polling agency. Coming in second and third respectively were President Valdas Adamkus at 78 per cent, and former President Algirdas Brazauskas at 74 per cent. Paksas is now being solicited by political parties throughout Lithuania, including the Women's Party, led by another ex-premier, Kazimiera Prunskiene.

President Adamkus also made a short visit to Sweden to discuss bilateral ties and EU issues. Adamkus met with Swedish Prime Minister Goran Persson, who has made the Baltic states his foreign policy priority for the year 2000.

A top NATO political council told Lithuanian officials that Lithuania's development plans for its military are a "model" among candidate countries. The delegation, headed by Deputy Foreign Minister Vygaudas Usackas, expressed hope that the next round of NATO enlargement would be announced at the next summit and would include Lithuania.

This past week, the government finally approved a new criminal code. The current criminal code has been active since the 1960s and contains punishments such as hard labour. The issue should go to the Seimas soon.

Russian President Boris Yeltsin sent the Russia-Lithuania Border Treaty to the Duma for ratification. The Seimas already ratified the treaty, signed in 1997, in October of this year. Yeltsin assigned Deputy Foreign Minister Aleksandr Avedeyev to oversee the ratification process.

Ratings agency Standard & Poor's issued a tough warning, though without downgrading Lithuania's BBB - long-term rating. The agency issued tough statements on the growing fiscal gap which has been exacerbated by the oil deal with US-based Williams International. The report also warned against "continuous politicking" that could hinder needed steps, such as fiscal prudence, continual privatisation and reform of industry.

Trade numbers for the first three quarters of 1999 were not encouraging, despite a 13 per cent, or LTL (Latvian litas ) 738 million, drop in the trade deficit. Exports in that period totalled LTL 9.07 billion, but imports totalled LTL 14.357 billion, making a trade deficit of LTL 5.287 billion. Trade to the EU remained strongest, accounting for 49.5 per cent of exports and 46.6 per cent of imports. Trade with the CIS continues to fall, accounting for 18.9 per cent of exports and 25.2 per cent of imports.

Gas utility Lietuvos Dujos (Lithuanian Gas) applied to regulators to raise tariffs. The company wants to raise gas tariffs by 77 per cent and hot water by 20 per cent.

Germany's Norddeutsche Landesbank opened its first branch office in Vilnius during the week, joining Poland's Kredyt Bank and France's Societe Generale as the only foreign banks with branches in Lithuania. Estonia's Hansapank established its subsidiary bank, Hansabankas, earlier this year in Lithuania. Norddeutsche Landesbank also hinted it is interested in further Baltic activities, including being the strategic investor at the revitalised Latvian bank, Pirma Latvijas Komercbanka (The First Commercial Bank of Latvia).

Power utility Lietuvos Energija (Lithuanian Energy) was named the second largest company in the Baltics, right behind Latvia's power utility Latvenergo. Lietuvos Telekomas (Lithuanian Telecom) was listed as fourth and Ignalina Nuclear Power Plant was sixth in the Baltics.

The October unemployment rate jumped by 0.5 per cent to 8.9 per cent nation-wide.

A report from the Finnish Social Ministry shows that Lithuanian women, on average, get 23 per cent less wages than men, the lowest discrepancy in the Baltics (Latvia at 30 per cent and Estonia 37 per cent). The same study showed that those between 30 and 39 years of age made, on average, the highest wages of any age group.

Archbishop of Kaunas, Sigitas Tamkevicius, was elected as the chairman of the Lithuanian Bishops' Conference for the next three years.

Lithuania's Ambassador to the EU, Romualdas Kalunaitis, made an embarrassing gaffe during a speech. He stated that Lithuania's annual contribution to the EU coffers after membership could be as high as EUR 500 million. Later he retracted the statement, saying he meant LTL 500 million (EUR 120 million).

Exchange Rates
As of 12 November 1999

Mel Huang, 12 November 1999

News Sources

Baltic News Service (BNS)
The Baltic Times
Radio Free Europe/Radio Liberty
Reuters news on Yahoo ELTA
Lietuvos Rytas
Lietuvos Aidas
Kauno Diena